Holcim US Building Materials Spin Off Notes

February 15, 2024 Update

On January 28, Holcim (SWX: HOLC) announced that it will be spinning off its U.S. building products business. The transaction is expected to be tax-free in nature and completed in the first half of 2025.

Holcim’s US building products business generates $11BN in sales and $2BN in operating earnings. It’s expected to continued to grow and increase margins.

My first impression is this transaction looks very interesting. HOLC currently trades at 7.5x forward EBITDA. US building products businesses (EXP, SUM, and MLM) trade between 9x and 15x. Thus, there should be some significant multiple expansion.

I’m following up with the company and plan to complete a SOTP analysis. More to come…