Another Possible Buyer French construction industry supplier Compagnie de Saint-Gobain SA is expanding into a Canadian market that faces an acute housing shortage by acquiring one of the country’s largest metal frame manufacturers for $880-million, its third major takeover in as many years.
Paris-based Saint-Gobain announced Wednesday it is buying Bailey Group of Cos., a family-owned business that makes the steel skeletons supporting residential and commercial buildings. The acquisition brings Saint-Gobain’s investments in Canada to $3-billion over the past three years.
Based in Vaughan, Ont., Bailey has 690 employees at 12 factories in British Columbia, Alberta, Ontario and Quebec. It posted sales of $532-million last year. Founded in 1950 by Sam Bailey, an immigrant from Britain, the company counts Saint-Gobain as a long-time customer.
Saint-Gobain is expanding at a time when Canada Mortgage and Housing Corp. estimates developers need to build 3½ million more homes by 2030, over and above the current rate of construction, to restore housing affordability. The company announced the Bailey acquisition a day after the federal government unveiled a $6-billion housing infrastructure fund meant to speed up construction.
Buying Bailey’s metal frame business is part of Saint-Gobain’s strategy of offering North American real estate developers a full range of building products. In a press release, the company said: “With this acquisition, Saint-Gobain will further reinforce its offer in light and sustainable construction in the attractive Canadian market.”
In 2022, Saint-Gobain bought siding producer Kaycan Ltd. for US$928-million. Last year, the French manufacturer acquired roofing company Building Products of Canada Corp. for US$994-million. Both companies are based in the Montreal area and were family owned.
Saint-Gobain is one of world’s largest suppliers to the construction industry, with €47.9-billion ($70-billion) in sales in 2023 and 160,000 employees in 76 countries. In many of these markets, Saint-Gobain already makes steel building frames.
The company traces its roots to 1655, when French king Louis XIV signed patents on its process for casting glass on metal tables. Saint-Gobain made the Hall of Mirrors in the Palace of Versailles.
Saint-Gobain is buying Bailey for a multiple of 9.6 times the Canadian company’s earnings before interest, taxes, depreciation and amortization, and paying cash. The French manufacturer forecasts achieving $26-million in annual costs savings at Bailey within three years, mainly from synergies on procurement and sales. The transaction is expected to close in the second half of this year.
Along with steel frames, siding and roofing material, Saint-Gobain makes plasterboard, insulation and wood panels.
Two years ago, Saint-Gobain faced an activist campaign from British fund manager Bluebell Capital Partners, which pushed for the sale of the manufacturer’s distribution arm and a renewed focus on its building materials business. Since then, Saint-Gobain has sold some of its divisions, including a treated wood business based in Britain. Its stock price has risen by 41 per cent over the past year.