Building materials group CRH has had a lot of interest in its European distribution arm ahead of a decision in the next two to three months on whether to trigger a sale, its chief executive Albert Manifold said today.
CRH put the entire unit under review last year.
Reuters reported earlier this month that CRH had hired Bank of America to launch the sale of the unit in a deal valuing the unit at about €2 billion – including debt.
The sale process is expected to begin next month and has already drawn interest from buyout funds including Advent, Lone Star and CVC, sources familiar with the matter said.
"We've had a lot of people interested. It's an area that there has been a lot of interest in, the distribution space. Private equity have been involved in this space for a decade," Albert Manifold told a news conference following the company's annual shareholder meeting today.
Mr Manifold said any sale hinged on what price the "improving" unit could fetch now versus its increased value if CRH hung onto it.
The sources said CRH was closely monitoring a similar sale by rival Saint Gobain and was waiting for the auction to enter its final stages before putting its own distribution business on the block as it would appeal to the same bidders.
Saint Gobain's sale is expected to wrap up next month.
CRH reported a 7% rise in first-quarter sales in a trading update yesterday, driven by its Europe Materials division where the largest buyer of cement in the world was able to increase prices in all of its markets.
The CRH CEO said today this was the first time in 15 years that CRH was able to increase cement prices across Europe.
Having flagged to investors that it was facing challenges in Britain due to ongoing Brexit-related uncertainty, Manifold said CRH had noticed a particular delay so far this year in getting commitments for large government-funded infrastructure projects.
"It's not just one project, it's a whole range of projects. There seems to be a reluctance to commit funding to large infrastructure projects from the treasury to the county councils and here we are at the end of April," he said.
"They should have started by now," he added.