Boral Buys Headwaters Inc. for $2.6 Billion

SOUTH JORDAN, Utah & SYDNEY – Headwaters Inc. will be acquired by Australian-based Boral Ltd. In a deal valued at an aggregate enterprise value of approximately $2.6 billion.

Both corporate boards unanimously approved the buyout announced earlier this week. Headwaters stockholders need to approve the acquisition, which now has a completion date of mid-2017.

“This is a compelling transaction that delivers significant value to our shareholders,” said Kirk A. Benson, Headwaters chairman/CEO. “Headwaters and Boral both have outstanding teams, and share a common commitment to delivering a premier selection of high-quality products to our customers.”

Headwaters offers a wide range of products and services for the U.S. construction industry, including energy technology and coal fly-ash recycling. Its most-visible brands, however, are with San Marcos, Calif.-based Eldorado Stone, with architectural natural stone and manufactured materials for hardscape and building cladding.

Headwaters bought Eldorado Stone in 2004 for an estimated $202.5 million, plus an excess working capital adjustment of $8 million, according to the Deseret News.

Sydney-based Boral is Australia’s largest building and construction materials supplier, with an extensive presence in the North American building and construction materials industry with bricks, concrete and clay roof tiles, manufactured stone and fly ash, and a developing light building products business.

Boral bought the Cultured Stone® line of manufactured architectural material from Owens Corning in late 2010 in a deal valued at a minimum of $90 million.

”The businesses of Headwaters are highly complementary with Boral’s existing US operations and the transaction price reflects our belief that there is strong commercial rationale for combining the two portfolios,” said Mike Kane, Boral’s chief executive and managing director.

Under the terms of the transaction, Headwaters’ stockholders will receive $24.25 per share in cash. This offer price represents 34% premium over Headwaters’ 30-day volume-weighted average closing stock price through Nov. 18.

“We are looking forward to working with Boral to ensure a smooth transition for our stakeholders, as we create one of the leading suppliers of building products and construction materials for infrastructure, new residential, repair and remodel, commercial and institutional construction,” Benson said.

Deutsche Bank Securities Inc. is acting as the financial advisor to Headwaters and Pillsbury Winthrop Shaw Pittman LLP is serving as legal counsel.

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