Transaction Grows Company’s Presence in Europe and Expands
Portfolio of Insulation Technologies
TOLEDO, Ohio--(BUSINESS WIRE)--
Owens Corning (NYSE:OC) today announced that it has signed an agreement
with CVC Capital Partners to acquire Paroc Group (“Paroc”), a leading
producer of mineral wool insulation for building and technical
applications in Europe, for an enterprise value of approximately €900
million. The transaction, which is subject to regulatory approvals and
other customary conditions, is anticipated to close in early 2018.
Paroc is a leading European manufacturer of high-performance mineral
wool insulation solutions for a variety of end markets. Paroc
manufactures building insulation for thermal, fire and acoustic
applications in residential and commercial construction. The company
also manufactures technical insulation for HVAC systems; industrial
processes; and the marine, offshore and original equipment manufacturer
industries. Mineral wool products are customarily known as stonewool in
Europe.
The acquisition of Paroc expands Owens Corning’s mineral wool
technology, grows its presence in the European insulation market,
provides access to a variety of new end-use markets and will increase
the company’s sales mix of the Insulation business outside the U.S. and
Canada to 35%.
Paroc’s 2017 sales are estimated to be approximately €410 million, with
adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA) margins slightly more than 20%. The transaction is expected to
be immediately accretive to 2018 earnings per share, excluding
transaction and integration costs. The transaction is expected to yield
a run rate of operational synergies of €15 million by the end of 2019.
Owens Corning Chairman and Chief Executive Officer Mike Thaman said,
“The acquisition of Paroc delivers on Owens Corning’s strategy to
provide our customers with a portfolio of insulation products that cover
the full temperature spectrum in the three largest insulation markets –
Europe, North America and China. Over its 80-year history, Paroc has
earned a reputation for high-quality products and technical expertise. I
am impressed with the Paroc team and believe they will be a great
addition to Owens Corning.”
Paroc employs over 1,800 people in 13 countries and operates
facilities in Finland, Lithuania, Poland, Russia, and Sweden.
“I am very excited about our new opportunities with Owens Corning,” said
Kari Lehtinen, Chief Executive Officer of Paroc. “We have built a
company with a leading market position, offering attractive value
propositions to our customers and employees. Owens Corning will help us
to expand further in the growing Central and Western European markets,
using our solid base as a platform for growth.”
Chairman of the Nordic Region at CVC Capital Partners Peter Törnquist
said, “We are pleased with Paroc’s strong performance and would like to
express our sincere thanks to its highly motivated and experienced team
and we wish them continued success as part of Owens Corning. There is a
very compelling strategic match with Owens Corning in terms of
geographical footprints, technologies and product offerings which will
greatly benefit customers as well as employees and shareholders.”
The company plans to finance the acquisition through a combination of
long-term debt and pre-payable bank financings.
J.P. Morgan Securities LLC and Lazard are representing Owens Corning as
financial advisors, and Jones Day acting as the company’s lead legal
advisor with support from Calfee, Halter & Griswold LLP and Krogerus.
Bank of America Merrill Lynch and Danske Bank are representing CVC
Capital Partners as financial advisors, and Freshfields Bruckhaus
Deringer LLP and Avance Attorneys Ltd. are acting as its legal advisors.
Additional resources, including a short supplemental presentation, are
available on the Owens Corning Investor Relations site. http://investor.owenscorning.com/investors/overview/default.aspx.
About Owens Corning
Owens Corning (NYSE:OC) develops, manufactures, and markets insulation,
roofing, and fiberglass composites. Global in scope and human in scale,
the company’s market-leading businesses use their deep expertise in
materials, manufacturing, and building science to develop products and
systems that save energy and improve comfort in commercial and
residential buildings. Through its glass reinforcements business, the
company makes thousands of products lighter, stronger, and more durable.
Ultimately, Owens Corning people and products make the world a better
place. Based in Toledo, Ohio, Owens Corning posted 2016 sales of $5.7
billion and employs about 17,000 people in 33 countries. It has been a
Fortune 500® company for 63 consecutive years. For more information,
please visit www.owenscorning.com.
About Paroc Group Oy
Paroc is one of Europe’s leading manufacturers of energy-efficient and
fire-proof stonewool insulation solutions for new and renovated
buildings, marine and offshore, acoustics and other industrial
applications. Throughout the company's 80-year history, they have earned
a reputation for high product performance, technical expertise and
sustainability among builders of single-family homes, architects,
contractors, dealers and industrial builders. Paroc's head office is in
Finland, and has operations in 13 countries, including seven production
plants in five countries. They sell products to over 40 countries
worldwide. In the end of year 2016, Paroc employed 1,835 people. In
2016, their net sales amounted to MEUR 375.5. For more information,
please visit www.paroc.com.
About CVC Capital Partners
CVC Capital Partners is a leading private equity and investment advisory
firm. Founded in 1981, CVC today has a network of 23 offices and
approximately 400 employees throughout Europe, Asia and the U.S. To
date, CVC has secured commitments of more than $107 billion from some of
the world's leading institutional investors across its European and
Asian private equity, strategic opportunities and growth funds. In
total, CVC currently manages over $65 billion of assets. Today, funds
managed or advised by CVC are invested in 50 companies worldwide,
employing c.310,000 people in numerous countries. Together, these
companies have combined annual sales of over $70 billion. For further
information about CVC please visit: www.cvc.com.
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. These forward-looking statements
are subject to risks, uncertainties and other factors and actual results
may differ materially from those results projected in the statements.
These risks, uncertainties and other factors include, without
limitation, our ability to complete successfully the acquisition of
Paroc and to achieve expected synergies of the acquisition, as well as
the factors detailed from time to time in the company’s Securities and
Exchange Commission filings. The information in this news release speaks
as of October 29, 2017, and is subject to change. The company does not
undertake any duty to update or revise forward-looking statements except
as required by federal securities laws.
This release contains references to certain "non-GAAP financial
measures" as defined by the SEC, including adjusted EPS. Adjusted EPS
excludes certain items that management does not allocate to its segment
results because it believes they are not representative of the Company’s
ongoing operations. Management uses non-GAAP measures for various
purposes, including reporting results of operations to the Board of
Directors, analysis of performance and related employee compensation
measures. Although management believes these measures, and
exclusions from GAAP therein, provide a useful representation of
performance, non-GAAP measures should not be considered in isolation or
as a substitute for the corresponding GAAP measures. When the company
provides forward-looking expectations for non-GAAP measures, the most
comparable GAAP measures and a reconciliation between the non-GAAP
expectations and the corresponding GAAP measures are generally not
available without unreasonable effort due to the variability, complexity
and limited visibility of the adjusting items that would be excluded
from the non-GAAP measures in future periods. The variability in timing
and amount of adjusting items could have significant and unpredictable
effects on future GAAP results.
Owens Corning Investor Relations News
View source version on businesswire.com: http://www.businesswire.com/news/home/20171029005077/en/
Source: Owens Corning