The world’s largest cement manufacturer, Holcim AG, has announced it will buy U.S. roofing maker Duro-Last for $1.29 billion.
The Swiss-based Holcim said it expects the recently-passed Inflation Reduction Act (IRA), with its allocations for nationwide construction projects, to create opportunities in the U.S. The acquisition of Michigan-based Duro-Last will enhance Holcim’s presence in the U.S., with the company predicting that 50% of its business will now come from the U.S., compared to 40% pre-acquisition.
Holcim has made other recent purchases in North America, as well, including residential roofing maker Malarkey, which it bought for $1.35 billion in December 2021.
Privately-owned Duro-Last, which has about $540 million in annual sales, specializes in roofing systems for the commercial building market. Its acquisition will boost Holcim’s roofing division sales past $4 billion by 2025, the company said.
Roofing is part of Holcim’s Solutions & Products division, which is more profitable — and more environmentally friendly — than its cement business. Solutions & Products had a recurring operating profit margin of 20% in the first nine months of 2022, compared to 16% for Holcim as a whole.
"In our view, the speed of transformation of Holcim towards an asset-light, more innovative, low-carbon construction solutions provider is not yet fully reflected in its valuation," Vontobel Holding AG analyst Bernd Pomrehn told Reuters.