Boral Limited sells US concrete asset to reduce debt

Shares in Boral Limited (ASX: BLD) were 1.7% up to $6.61 on Thursday, after the construction materials company announced the sale of its US concrete and quarries business to Brannan Sand and Gravel for US$127 million (circa AU$170 million).

The sale price implies a trailing EV/EBITDA multiple of between 8 and 9. CEO Mike Kane explained that while the business has performed well, it was the right time to realise value by selling a non-core asset. In the first half of FY18, the US concrete and quarries business contributed US$52 million, or just around 5%, to Boral North America’s revenue.

Following the acquisition of Headwaters for US$2.6 billion last year, Boral North America accounts for about one third of the group’s revenue. The division’s core businesses are fly ash, roofing and manufactured stone.

Boral will use sale proceeds to improve its financial position. The company had AU$2.4 billion net debt at December 31, with gearing of 30%.

The transaction is expected to be completed on May 31, subject to customary completion adjustments and regulatory approvals, and will result in a pre-tax profit of around US$45 million, which will be reported as a significant item in FY18.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.