Morningstar | CRH Sells European Distribution Business for Good Price; Slight Increase to FVE. See Updated Analyst Note from 16 Jul 2019
On July 16, CRH announced the sale of its European distribution business to Blackstone for EUR 1.6 billion in cash. After accounting for year-to-date portfolio changes, the European distribution business generated EUR 3.7 billion in sales and EUR 155 million in EBITDA.We think CRH received slightly above fair value for the asset sale, slightly offset by a stronger U.S. dollar since our last update. Having updated our model to reflect these changes, we’ve raised our fair value estimates to $36 and GBX 2,900 per share, respectively, up from $35.50 and GBX 2,700, respectively. Our no-moat rating remains unchanged, although the company continues to pivot away from businesses that do not hold a competitive advantage. At current prices, shares look fairly valued on a risk-adjusted basis.
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