STARK Group has signed an agreement with Compagnie de Saint Gobain SA, to acquire German builders’ merchant Saint Gobain Building Distribution Deutschland GmbH, SGBDD.
The move gives STARK a much larger footprint in the builders' merchant industry in Northern Europe. The purchase includes a nationwide network of 220 branches and circa 5,000 employees, serving customers in the renovation and new construction sectors. SGBDD operates in three major business areas; Heavy Building materials, Tiles and Civil Engineering.
STARK currently operates 186 branches across the Nordics through its subsidiaries STARK Danmark A/S in Denmark and Greenland, Beijer Byggmaterial AB in Sweden, STARK Suomi OY in Finland and Neumann Bygg AS in Norway.
Saint Gobain's German builders' merchant business generated total net sales of €2 billion and €48 million of LTM adjusted EBITDA end of April 2019. The acquisition has an enterprise value of EUR 335 million and is subject to approval by relevant authorities, expected to be completed in H2 2019.
“I am very pleased to announce the acquisition of SGBDD. With this landmark transformation of STARK Group, we will enter into the largest building material market in Europe and double our size in a volume driven business creating significant value for our customers and owners," said STARK Group CEO Søren P. Olesen. "At the same time, we will strengthen our ability to realise additional scale benefits. The construction industry is highly competitive with low margins, which requires an efficient operation.”
According to the PR, SGBDD is well positioned to capture further market share in the large German construction market with consistent demand, which has shown resiliency through economic downturns.
Olesen added: “We have a clear strategy, focused primarily on serving professional customers in the construction and renovation industry. Our core offering is to provide building material at the best price when and where it’s needed while also adding value to our customers' businesses through additional services and advice as well. In that context, economy of scale and local presence are important competitive edges along with in-depth engagement and knowledge about our customers.
“We are very well positioned to bring our experience, competencies, people and proven results into play on the German market. We will do so in close collaboration with the local management and valued employees of SGBDD, who knows their daily operation, customers and partners the best in all the local branches across Germany."
