Gypsum industry news

US: KPM Analytics has acquired Sensortech Systems. The purchase builds KPM Analytics’ portfolio of near infrared (NIR) technology and adds radio frequency (RF) products. Sensortech Systems’ products are used by customers around the world for real-time moisture measurement in process control across a variety of industries, including gypsum wallboard production. No value for the transaction has been disclosed.

“Sensortech is a natural extension to KPM’s Operating Companies; AMS Alliance, Unity Scientific, CHOPIN Technologies, Sightline Process Control and particularly Process Sensors Corporation” said Chris McIntire, the chief executive officer (CEO) of KPM Analytics.

Colin Hanson, the CEO of Sensortech Systems will remain in post following the acquisition, as will the management team. The company was originally incorporated in 1983. It is based in Oxnard, California.

US: Germany’s Knauf has completed its acquisition of USG. The company said that the purchase would create, “a global building materials industry leader that will be even better positioned to meet customers' needs by leveraging two highly complementary businesses, product portfolios and global footprints.”

"We greatly admire USG's strong brands, leading market positions in North American wallboard and ceilings, and highly talented employee base,” said Alexander Knauf, General Partner of Knauf. He added that the transaction was the largest acquisition in Knauf’s history.

Knauf agreed to buy USG in mid-2018 for US$7bn. The Australian Competition and Consumer Commission has approved the deal in late March 2019 subject to asset divestments relating to its Boral-USG joint venture.

Mexico: Saint-Gobain has completed the acquisition of Knauf Mexico for an undisclosed sum. Knauf operates a 26Mm² gypsum wallboard plant at Queretaro that it purchased from PPG in 2017.

Australia: The Australian Competition and Consumer Commission (ACCC) has approved Knauf’s acquisition of USG subject to asset divestments. The ACCC’s review focused on competition for the supply of wallboard, joint plaster compounds and treatments, metal profiles, fixed and modular suspended ceilings and insulation.

USG has a presence in Australia through its USG-Boral joint venture, which the ACCC says competes with Knauf and with Armstrong World Industries. The commission requires Knauf to divest USG’s interest in the joint venture, either entirely or just in Australasia, to a buyer approved by the ACCC. If divestiture of the joint venture interest is not achieved within a certain period, Knauf has agreed to divest certain other assets.

“The transactions raised some significant concerns as it would lead to Knauf owning a 50% in the joint venture, which is a significant competitor in several markets, including markets with limited alternatives for customers,” said ACCC Commissioner Roger Featherston.

Each acquisition is subject to review by different international competition agencies given the global nature of the Knauf’s acquisition of USG.

US: Germany’s Knauf has appointed Christopher Griffin as the head of USG following the completion of its acquisition. Griffin, currently the chief executive officer (CEO) of Knauf Insulation North America, holds over 35 years of experience in the building materials industry, including 18 years with USG where he served in several senior roles, including chief operating officer.

"Bringing USG and Knauf together offers a compelling value proposition for both USG's and Knauf's customers. Knauf is committed to growing the strength of USG brands and its presence in North America. Our highly complementary businesses, products, and global footprint position the combined company to better meet the needs of customers. Following the closing of the merger, Knauf intends to maintain USG's existing corporate headquarters in Chicago," said Alexander Knauf, General Partner of Knauf.

Other personnel changes of note include the appointment of Joseph W Holmes as the Senior Vice President of the Gypsum Division. Stephanie Holdt, currently Vice President of Controlling at Knauf will join USG as Senior Vice President and chief financial officer.

US: GMS’s half-year wallboard sales have risen due to its acquisition of Canada’s Titan on 1 June 2018 and rising prices. Its wallboard sales rose by 14% year-on-year to US$652m in the half year to 31 October 2018, from US$573m in the same period in 2017. Overall, the wallboard distributor’s net sales increased by 25% to US$1.61bn.

US: USG shareholders have approved an agreement and plan to accept Knauf’s takeover of the company. Approximately 99% of all votes cast voted in favour of the adoption of the agreement, representing approximately 88% of all outstanding shares as of 21 August 2018. Adoption of the merger agreement by USG stockholders is a condition to the closing of the merger. The merger is subject to certain other customary closing conditions, including receipt of regulatory approvals. The company currently expects the deal to close in early 2019.

Australia: Australia’s competition watchdog is investigating Knauf”s proposed US$7bn takeover of Boral’s US-based joint venture partner USG for potential breach of its merger rules. The Boral-USG joint venture is the biggest gypsum wallboard supplier in Australia, followed by CSR. Knauf is third largest, meaning that the takeover would combine the number three and number one providers in Australia.

Boral CEO Mike Kane said that he had formally served a notice of default to Knauf, triggering an automatic review of the value of the joint venture. When the valuation is completed Boral will then decide whether to exercise its right of first refusal over the Asian and Australian joint venture operations. This is expected to be finalised during October 2018.

US: L&W Supply Corp., a distributor of gypsum wallboard, ceiling systems, steel framing and other building materials for contractors, has announced the acquisition of Rose & Walker Supply.

Rose & Walker is a five-branch distribution company based in Columbus, Ohio. The family-owned business started in 1986 and provides wallboard products, metal studs, ceiling systems and insulation. Rose & Walker has branches in Bloomington, Columbus, Lafayette, Indianapolis and Terre Haute.

L&W says that, as a leading distributor of interior building products, the acquisition supports its overall growth strategy. With this acquisition, L&W now operates 163 locations in 35 states.

US: German building materials company Gebr. Knauf KG is set to acquire Chicago-based USG Corporation in a US$7bn deal, following months of discussion and heated exchange between the two companies. USG shareholders will receive US$44/share, according to the terms of the agreement. This consists of US$43.50/share in cash payable and US$0.50/share in a special dividend after shareholders approve the deal, which is expected to close in early 2019.

Knauf intends to continue operations from USG’s headquarters in Chicago.
Berkshire Hathaway and its subsidiaries, which own a collective 31% of USG, have agreed to vote in favour of the acquisition. The deal allows Berkshire to leave what CEO Warren Buffet deemed a ‘disappointing’ investment, according to Bloomberg.

In 2001, USG filed for bankruptcy protection and was later saved by an investment from Berkshire in 2006. Knauf has been pursuing USG since November 2017. In March 2018, USG rejected an offer by Knauf to purchase the construction materials company for US$5.9bn.

“We are excited to enter into an agreement to acquire USG,” said Alexander Knauf, general partner of Knauf, in a company statement. “As a long-term USG shareholder, we greatly admire USG's strong brands, leading market positions in North American wallboard and ceilings and highly talented employee base."

Jennifer Scanlon, president and chief executive officer of USG, added, “Our Board has worked diligently to evaluate all strategic options to maximise value for our shareholders, and we are pleased to have reached this agreement, which provides our shareholders with significant and certain cash value. We believe this transaction will create new opportunities for both companies' customers and will benefit USG's employees who will be part of a truly global building products company.”