Gypsum industry news

US: A shareholder in Continental Building Products is taking legal action against the company over its acquisition by France’s Saint-Gobain on 14 October 2019. The claimant alleges that company withheld necessary information from shareholders prior to the transaction, in violation of Securities and Exchange Commission regulations.

Brazil: E2E, a Chile-based joint venture founded by Etex and Arauco, a diversified global company active in the forestry industry, has signed a share purchase agreement to acquire a majority stake in Tecverde Engenharia, a Brazilian building company specialised in wood-frame construction systems. The completion of the deal is subject to the approval of the Brazilian Competition Authority (CADE) and other customary conditions. No value for the transaction has been disclosed.

Tecverde uses a wood-frame construction systems that allows for nearly a full building to be fabricated in a climate-controlled factory and completed with the installation of wall panels during final assembly at the construction site. E2E combines Etex’s experience in plasterboard and fibre cement technology with Arauco’s knowledge of sustainable forest product solutions. The joint venture develops and manufactures complete construction solutions composed of panels, wooden interior structures and external boards.

France: Saint-Gobain has entered an agreement with US-based Continental for the acquisition of the latter’s Building Products section at an estimated value of Euro1.4bn. Saint-Gobain stated that the North American plasterboard producer has ‘strong geographic complementary’ with its existing operations in the continent, with a possible gain of Euro45.3m in cost synergies and performance improvements. It also noted Continental Building Products’ good positioning in its Eastern and South-Eastern United States growth regions and strong profitability.

Australia: US-based private equity company Lone Star Funds is considering acquiring Boral, according to the Australian newspaper. Lone Star Funds purchased building materials manufacturer Forterra from Heidelberg Cement. Boral later formed a joint venture with Forterra Brick in the US in 2016. In a separate deal Lone Star Funds later purchased German building materials producer Xella. Despite growing revenue from continuing operations, Boral’s net profit after tax fell by 7% year-on-year to US$301m in the year to 30 June 2019.

US: KPM Analytics has acquired Sensortech Systems. The purchase builds KPM Analytics’ portfolio of near infrared (NIR) technology and adds radio frequency (RF) products. Sensortech Systems’ products are used by customers around the world for real-time moisture measurement in process control across a variety of industries, including gypsum wallboard production. No value for the transaction has been disclosed.

“Sensortech is a natural extension to KPM’s Operating Companies; AMS Alliance, Unity Scientific, CHOPIN Technologies, Sightline Process Control and particularly Process Sensors Corporation” said Chris McIntire, the chief executive officer (CEO) of KPM Analytics.

Colin Hanson, the CEO of Sensortech Systems will remain in post following the acquisition, as will the management team. The company was originally incorporated in 1983. It is based in Oxnard, California.

US: Germany’s Knauf has completed its acquisition of USG. The company said that the purchase would create, “a global building materials industry leader that will be even better positioned to meet customers' needs by leveraging two highly complementary businesses, product portfolios and global footprints.”

"We greatly admire USG's strong brands, leading market positions in North American wallboard and ceilings, and highly talented employee base,” said Alexander Knauf, General Partner of Knauf. He added that the transaction was the largest acquisition in Knauf’s history.

Knauf agreed to buy USG in mid-2018 for US$7bn. The Australian Competition and Consumer Commission has approved the deal in late March 2019 subject to asset divestments relating to its Boral-USG joint venture.

Mexico: Saint-Gobain has completed the acquisition of Knauf Mexico for an undisclosed sum. Knauf operates a 26Mm² gypsum wallboard plant at Queretaro that it purchased from PPG in 2017.

Australia: The Australian Competition and Consumer Commission (ACCC) has approved Knauf’s acquisition of USG subject to asset divestments. The ACCC’s review focused on competition for the supply of wallboard, joint plaster compounds and treatments, metal profiles, fixed and modular suspended ceilings and insulation.

USG has a presence in Australia through its USG-Boral joint venture, which the ACCC says competes with Knauf and with Armstrong World Industries. The commission requires Knauf to divest USG’s interest in the joint venture, either entirely or just in Australasia, to a buyer approved by the ACCC. If divestiture of the joint venture interest is not achieved within a certain period, Knauf has agreed to divest certain other assets.

“The transactions raised some significant concerns as it would lead to Knauf owning a 50% in the joint venture, which is a significant competitor in several markets, including markets with limited alternatives for customers,” said ACCC Commissioner Roger Featherston.

Each acquisition is subject to review by different international competition agencies given the global nature of the Knauf’s acquisition of USG.

US: Germany’s Knauf has appointed Christopher Griffin as the head of USG following the completion of its acquisition. Griffin, currently the chief executive officer (CEO) of Knauf Insulation North America, holds over 35 years of experience in the building materials industry, including 18 years with USG where he served in several senior roles, including chief operating officer.

"Bringing USG and Knauf together offers a compelling value proposition for both USG's and Knauf's customers. Knauf is committed to growing the strength of USG brands and its presence in North America. Our highly complementary businesses, products, and global footprint position the combined company to better meet the needs of customers. Following the closing of the merger, Knauf intends to maintain USG's existing corporate headquarters in Chicago," said Alexander Knauf, General Partner of Knauf.

Other personnel changes of note include the appointment of Joseph W Holmes as the Senior Vice President of the Gypsum Division. Stephanie Holdt, currently Vice President of Controlling at Knauf will join USG as Senior Vice President and chief financial officer.

US: GMS’s half-year wallboard sales have risen due to its acquisition of Canada’s Titan on 1 June 2018 and rising prices. Its wallboard sales rose by 14% year-on-year to US$652m in the half year to 31 October 2018, from US$573m in the same period in 2017. Overall, the wallboard distributor’s net sales increased by 25% to US$1.61bn.