Publicly traded Continental Building Products Inc. said Tuesday that it agreed to be sold to France’s Compagnie de Saint-Gobain for $1.4 billion in cash.
Gibson Dunn & Crutcher advised Continental Building led by Dallas partner Jeffrey Chapman.
Other Texas lawyers on the team were associate Paige Lager, partner David Sinak and associate Michael Cannon on tax, partner Krista Hanvey on benefits and associate Tyler Richardson on antitrust, all of Dallas.
Clearly Gottlieb Steen & Hamilton counseled Saint-Gobain out of New York (partner Jim Langston).
Citi was Continental Building’s financial advisor, including Nathan Eldridge and Rich Moriarty.
The price works out to $37 per share, a 34.4% premium over the target’s volume weighted average share price over the 60 days ending Nov. 11.
Bloomberg reported earlier Tuesday that Saint-Gobain was near a deal to buy the Herndon, Va.-based company.
Continental Building makes gypsum wallboard and related finishing products for the residential, commercial and repair and remodel construction markets, primarily in the eastern U.S. and eastern Canada.
Saint-Gobain is a worldwide maker and distributor of materials and solutions in the building, transportation, infrastructure and industrial markets. It had 2018 sales of $41.8 billion, operates in 68 countries and employs 180,000.
Continental Building chairman Edward Bosowski said in a statement that the deal will provide liquidity, certainty and compelling value to the company’s stockholders.
“We believe our combined business will be better positioned to enhance our product offerings, customer relationships and operating platform,” he said.
The transaction has to clear Continental Building shareholders and antitrust regulators. Continental Building will be merged with and into a newly formed unit of Saint-Gobain.
Continental also announced third quarter results. Among the highlights: Wallboard sales volumes increased 4.6%, sales slipped 2.9% to $127.4 million, cash flow from operations reached $24.2 million and $7.5 million was deployed into capital investments, primarily for high-return initiatives.
Continental Building CEO and president Jay Bachmann said the company generated significant cash flows from operations during the quarter thanks to its low cost, efficient operations and that sales volumes improved in the quarter.
“We continue to be encouraged by strengthening demand in the new home construction market,” he added.
The company said it fully settled a previously disclosed insurance claim for its Buchanan, New York, plant and recovered all estimated operating income lost due to the business interruption.
In January, the plant experienced an equipment malfunction, resulting in a temporary outage. The company had standard insurance coverage intended to cover such circumstances, including business interruption insurance.
The company said that during the nine months ended Sept. 30, it recorded $4.9 million of insurance claim proceeds to compensate for estimated operating income associated with the lost sales from the interruption.