Wienerberger announces major expansion step in the Western US

Vienna (OTS) -

  • Wienerberger acquires Robinson Brick Company in Denver, USA, for US$ 88 million plus net working capital as of closing date (at year-end 2005: US$ 28 mill.)
  • Major strategic expansion step in the Western US
  • Annual synergy potential of approx. US$ 5 million from optimization and cross-selling
  • Wienerberger further strengthens its market position in the world’s largest facing brick market

Robinson Brick Company as gateway to the west
Wienerberger has signed an agreement to acquire Robinson Brick Company (RBC) through its wholly owned subsidiary General Shale and thereby completed a major expansion step in the western region of the USA. RBC is a manufacturer of bricks and distributor of high-end masonry products, headquartered in Denver, Colorado. In 2005 the company generated revenues of US$ 87 million and EBITDA of US$ 14 million with 505 employees. The investment totals US$ 88 million plus net working capital as of the closing date (net working capital at year-end 2005 was roughly US$ 28 million). "The acquisition of RBC represents an important expansion step. Up to now, our activities in the USA have concentrated entirely on markets east of the Mississippi. This transaction is a great opportunity for a market entry in the western part of the country. RBC is an ideal geographic addition to our US subsidiary General Shale", commented Wolfgang Reithofer, CEO of Wienerberger AG, on this latest acquisition. "We will also benefit from the product know how of our new colleagues, above all in the areas of building stone (1) and thin bricks (2), and the related expansion of our product portfolio", added Dick Green, CEO of General Shale.

1) Real stone from own quarries
2) Thin facing bricks with antique optics for interior and exterior decoration

RBC focused on growth

Robinson Brick Company was founded in 1880 and previously operated under the majority ownership of F. George Robinson Jr. and management. RBC is a producer and distributor for facing bricks, concrete blocks, building stone, thin bricks and pavers. The company operates a brick plant in Denver with a total annual capacity of more than 100 million brick units, three concrete block factories in Colorado Springs, Cheyenne and Torrington, producing 8 million units per year, and 17 distribution outlets in six states (Colorado, Wyoming, Montana, Nebraska, Illinois and Oklahoma). Under the current and remaining CEO Robert Jaster, the company has pursued an ambitious and highly successful growth strategy in recent years. "We are pleased to have Robert Jaster join our team. RBC has shown significant development under his direction, and Jaster shares our commitment to profitable growth. He is a perfect match for our management team", commented Reithofer.

"We are very excited about becoming a member of the Wienerberger Group", said Jaster. With the additional financial resources and opportunities afforded by our new owners, we can further accelerate our market expansion and sustain our leading brand identity." Jaster continued, "Our manufacturing and product innovation capabilities, combined with the strength of the world’s largest brick manufacturer, will enable us to leverage synergies to increase brick and block capacity, and ultimately total market share."

Quick and effective use of revenue and cost synergies

The combination of RBC and General Shale will create a large number of synergies that both companies can benefit from quickly and efficiently. In the future thin bricks and building stones, which are currently not produced by General Shale, will be sold by the company’s sales and distribution network. "We expect to realize synergies of roughly US$ 5 million per year from optimization and cross-selling", explained Dick Green. In addition, RBC is a perfect platform for the expansion of Wienerberger in the western region of the USA and will contribute to a further long-term growth in EBITDA of our North American activities.

USA: a market with long-term growth potential

The USA is one of the fastest growing economies in the world. GDP rose 4.2% in 2005, and forecasts call for an increase of roughly 4% this year. Demographic trends indicate long-term population growth, which will also - despite short-term variations - have a substantial and lasting positive impact on new residential construction. "This background underscores the significance of the Robinson Brick Company acquisition for the profitable Wienerberger growth strategy. Starting immediately, we will also be active in the western region of the world’s largest facing brick market, where we will work to continually expand our market position. In addition this transaction is EPS accretive from day one", concluded Reithofer.

Wienerberger in the USA
Wienerberger: successful on the the US market since 1999

Wienerberger entered the US brick market in 1999 with the acquisition of the then second largest brick producer, General Shale. The takeover of Darlington and Cherokee Sanford followed in 2000. Wienerberger has invested approximately US$ 500 million to date (excluding RBC) in the USA for acquisitions, the construction of new plants and optimization measures.

Rückfragen & Kontakt:

For additional information contact:
Thomas Melzer, Public and Investor Relations
Tel.: +43(1)60192-463; communication@wienerberger.com

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