Corporate Action - Boral U.S. Expansion via AUD 3.5 Billion Acquisition. FVE Reduced to AUD 4.80
No-moat-rated Boral has entered a binding agreement to buy U.S.-listed Headwaters for AUD 3.5 billion. The deal will be funded by AUD 2.1 billion in new equity, AUD 1.1 billion in debt, and existing cash. The equity component includes a 1 for 2.22 entitlement offer to existing shareholders. Our fair value estimate is reduced 4% to AUD 4.80 after revising Boral U.S. earnings and including the acquisition and raising. Based on the theoretical ex-rights price, or TERP, Boral is overvalued, and the ...Boral manufactures and supplies building and construction materials in Australia, the U.S. and Asia. Co.'s segments are: Construction Materials & Cement, consisting of quarries, concrete, asphalt, transport, landfill, property, cement and concrete placing; Building Products, consisting of Australian bricks, roofing and masonry, and timber products; Boral Gypsum Joint Venture, which manufactures and sells plasterboard and associated products; and Boral USA, consisting of bricks, cultured stone, roof tiles, fly ash, concrete and quarries. The primary end use markets for Co.'s products include residential and non-residential construction and the engineering and infrastructure markets.
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