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Simpson Manufacturing agrees to buy Etanco for about $818 million

By Reuters

-Building materials producer Simpson Manufacturing Co said on Wednesday it had agreed to buy European peer Etanco Group for about $818 million.

The acquisition, which is expected to close by the end of the first quarter of 2022, is anticipated to add to Simpson’s earnings within the first full fiscal year following the deal.

“We expect the acquisition to drive significant net sales growth with operating income synergies of approximately $30 million on an annual run rate basis,” said Karen Colonias, president and chief executive officer of Simpson.

The transaction would allow the company to enter into new commercial building markets such as facades, waterproofing, safety and solar, as well as grow its share of direct business sales, Simpson said.

The purchase is expected to be funded via a combination of $100 million of existing cash, with the rest from borrowings under the company’s existing revolving credit facility and a $450 million unsecured term loan with committed financing from Wells Fargo Bank and MUFG Union Bank.

Simpson said the credit facility will be increased to $450 million from $300 million.

EC Mergers & Acquisitions and KPMGLLP served as financial advisers to Simpson, which is valued at $5.97 billion.