Peru Group Bags Lafarge Chile Asset

France’s Lafarge has sold its Chilean cement, aggregates and concrete assets to Peru’s Brescia Group for $555m enterprise value, equal to 7.4x 2008 Ebitda. Chile-based analysts say the price paid for the package 84% owned by Lafarge Chile is fair to cheap. A Santiago-based equity analyst covering similar industries, who asks not to be identified, calculates that the transaction is in line with expectations. In 2004, he adds, Chile’s SQM sold a 14.05% share in Lafarge predecessor Empresas Melon for $69m, or about 7.2x Ebitda. However, another Chile-based analyst notes that other recent LatAm transactions in the construction industry have been done at 8x-10x Ebitda. In May, Lafarge announced it sold similar assets in Turkey for EUR163m, or 10x Ebitda. Lafarge’s Santiago stock closed down 1.8% at CLP58.9 Tuesday and the deal is valued at CLP54.2 per share, according to a filing with the Chilean securities commission. The transaction will be effective by August 31, following the launch of a public tender to purchase minority interests by the buyer for Lafarge Chile. Lafarge’s minority participation in its Chilean gypsum activities is not included in the sale. Celfin advised Brescia and Rothschild worked with Lafarge, which has been in Chile since 2001 through Lafarge Chile and Immobiliaria San Patricio. The assets sold include the La Calera cement plant, located around 100km from Santiago with a capacity of 1.5m tonnes, along with the Puerto Montt grinding station in southern Chile, which has a capacity of 300,000 tonnes. Lafarge is also selling 54 ready-mix concrete units, 5 aggregates quarries, an import terminal and a mortar production unit. The transaction is part of Lafarge’s announced 2009 EUR1bn divestment program, which is 75% complete.