NASHVILLE, Tenn.—Cement and concrete giant LafargeHolcim Ltd. is buying Firestone Building Products with plans to become a global player in flat roofing systems.
Zug, Switzerland-based LafargeHolcim is paying $3.4 billion to Bridgestone Americas Inc. to create an entryway into the new business segment, while also boosting its existing sales in the U.S.
Adding roofing to the company's current U.S. business will bring sales to more than $6 billion annually, growing LafargeHolcim's biggest market.
Firestone Building Products is part of Bridgestone Americas Inc. of Nashville, and the decision to sell off the roofing business creates cash to reinvest in the company's core tire business as well as mobility solutions.
For LafargeHolcim—best known for cement, concrete, aggregates and related building supplies—the purchase of Firestone Building Products is seen as a growth platform to allow expansion into the Europe and Latin America flat roofing markets.
LafargeHolcim is buying an already-profitable roofing business with estimated sales of $1.8 billion in 2020 and earnings before interest, taxes, depreciation and amortization of $270 million.
"This acquisition is a milestone in LafargeHolcim's transformation to become the global leader in innovative and sustainable building solutions," the company said.
CEO Jan Jenisch called the deal a "transformational acquisition" for LafargeHolcim. "That's a real milestone for us in transforming LafargeHolcim into a company with the most innovative and most sustainable building materials products for the future."
"I feel really fortunate to partner with such an iconic company such as Firestone Building Products. They are the leader in the U.S. market. They are the leader in the most attractive flat roofing systems. And they are the leader in systems selling, selling all of those insulated roofs, cool roofs, green roofs. They are really building the roofs for our future," he said.
Firestone Building Products has 15 manufacturing faculties, described by the CEO as state-of-the-art. A total of 13 of those sites are in the U.S. and two are in Europe. "There are no shortcuts. They have the highest standards in manufacturing, in health and safety and all the technologies. This was a very good finding we had from looking closely at the business in the last couple of weeks," the CEO said.
The company has two EPDM membrane manufacturing locations, two thermoplastic polyolefin membrane manufacturing sites and one liquid applied waterproofing manufacturing facility. There are an additional eight insulated products manufacturing plants as well as one metal and one asphalt manufacturing location.
Research and development happens at three technical centers in Waukesha, Wis.; Fishers, Ind.; and Brussels, Belgium.
Firestone Building Products is the fourth-largest flat roofing company in the world with 4 percent of the market share. The top firm, by contrast, has a 7-percent share, LafargeHolcim said.
"That allows for growth in the U.S. We have still a lot to do in the U.S. market. We are far away from having the right size," Jenisch said. "We have a great opportunity here to accelerate the expansion in Europe. With the LafargeHolcim footprint in all the key markets, I think we can support here a lot of smart organic investments but also some bolt-on acquisitions to multiply our sales and our market position in Europe. I think the same we will do in Latin America where we have huge opportunities," he said.
In Latin America, LafargeHolcim also will use its Disensa retail chain of about 2,300 construction materials and home improvement stores to help sell Firestone Building Products offerings across the counter. Disensa has retail sites in Mexico, Brazil, Colombia, Ecuador, El Salvador, Argentina and Costa Rica.