Acquisitions

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

4. Acquisitions

The Company strategically acquires companies in order to increase its footprint and offer products and services that diversify its existing offerings. These acquisitions are accounted for as business combinations using the acquisition method, whereby the purchase price is allocated to the assets acquired and liabilities assumed, based on their estimated fair values at the date of the acquisition with the remaining amount recorded in goodwill.

During 2023, the Company completed the acquisition of 22 companies, each individually immaterial. The total cash consideration for these acquisitions net of cash acquired, was $640 million.

The provisional amounts for assets acquired, liabilities assumed, and consideration related to the acquisitions at December 31, 2023 were:

in $ millions	Total
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents	19
Accounts receivable, net	71
Inventories	65
Other current assets	8
Property, plant and equipment, net	252
Intangible assets, net	86
Operating lease right-of-use assets, net	35
Accounts payable	56
Accrued expenses	30
Operating lease liabilities	35
Long-term debt	104
Deferred income tax liabilities	30
Other liabilities	6
Total identifiable net assets at fair value	275
Goodwill	398
Total consideration	673
Consideration satisfied by:
Cash payments	659
Deferred consideration (stated at net present cost)	8
Contingent consideration	6
Total consideration	673
Acquisitions of businesses, net of cash acquired
Cash consideration	659
Less: cash and cash equivalents acquired	(19)
Total outflow in the Consolidated Statements of Cash Flows	640

As a result of the 2023 acquisitions, the Company recognized $86 million of amortizable intangible assets and $398 million of goodwill. Goodwill represents the excess of the consideration paid over the fair value of net assets acquired and includes the expected benefit of cost savings and synergies within the Company’s segments and intangible assets that do not qualify for separate recognition. Of the Goodwill recognized in respect of the acquisitions completed in 2023, $33 million is expected to be deductible for tax purposes. The amortizable intangible assets will be amortized against earnings over a weighted average of 6 years.

On November 21, 2023, the Company announced that it had reached an agreement to acquire a portfolio of cement and readymixed concrete assets and operations in Texas, United States from Martin Marietta, Inc. (the ‘Transaction’) for a total consideration of $2.1 billion. On February 9, 2024, the Transaction was completed. The assets acquired are located in the United States and are expected to strengthen the Company’s position in Texas as well as increasing exposure to attractive, high-growth markets. Due to the timing of the Transaction, the preliminary purchase price accounting remains ongoing as the Company continues to collect and assess information as of the transaction date.

There have been no other acquisitions completed subsequent to the balance sheet date which would be individually material to the Company.

2022 Barrette Outdoor Living, Inc. Acquisition

On July 8, 2022 the Company acquired Barrette Outdoor Living, Inc. (Barrette), North America's leading provider of residential fencing and railing solutions headquartered in Middleburg Heights, Ohio, United States, at an effective 100% stake. The assets acquired are all in the United States and are expected to enhance the Company’s existing offering of sustainable outdoor living solutions in North America. The total cash consideration for this acquisition, net of cash acquired, was $1,903 million.

During 2022, the Company completed the acquisition of 28 other companies, each individually immaterial. The total cash consideration for these acquisitions net of cash acquired, was $1,350 million.

The identifiable assets acquired, liabilities assumed, and consideration related to the acquisitions at December 31, 2022 were:

in $ millions	Barrette	Other acquisitions	Total
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents	8	14	22
Accounts receivable, net	128	49	177
Inventories	247	128	375
Other current assets	40	10	50
Property, plant and equipment, net	266	539	805
Equity method investments	–	28	28
Intangible assets, net	809	178	987
Operating lease right-of-use assets, net	43	59	102
Accounts payable	26	20	46
Accrued expenses	121	27	148
Operating lease liabilities	43	59	102
Long-term debt	–	8	8
Deferred income tax liabilities	192	55	247
Other liabilities	22	4	26
Total identifiable net assets at fair value	1,137	832	1,969
Goodwill	774	546	1,320
Total consideration	1,911	1,378	3,289
Consideration satisfied by:
Cash payments	1,911	1,364	3,275
Deferred consideration (stated at net present cost)	–	10	10
Contingent consideration	–	4	4
Total consideration	1,911	1,378	3,289
Acquisitions of businesses, net of cash acquired
Cash consideration	1,911	1,364	3,275
Less: cash and cash equivalents acquired	(8)	(14)	(22)
Total outflow in the Consolidated Statements of Cash Flows	1,903	1,350	3,253

As a result of the 2022 acquisitions, the Company recognized $987 million of amortizable intangible assets and $1,320 million of goodwill. Goodwill represents the excess of the consideration paid over the fair value of net assets acquired and includes the expected benefit of cost savings and synergies within the Company’s segments and intangible assets that do not qualify for separate recognition. Of the Goodwill recognized in respect of the acquisitions completed in 2022, $1,289 million is expected to be deductible for tax purposes. The amortizable intangible assets will be amortized against earnings over a weighted average of 19 years.

During 2021, the Company completed the acquisition of 20 companies (19 continuing operations), each individually immaterial. The total cash consideration for these acquisitions net of cash acquired, was $1,494 million.

The identifiable assets acquired, liabilities assumed, and consideration related to the acquisitions at December 31, 2021 were:

in $ millions	Total
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents	7
Accounts receivable, net	173
Inventories	157
Other current assets	18
Property, plant and equipment, net	526
Intangible assets, net	131
Operating lease right-of-use assets, net	83
Accounts payable	94
Accrued expenses	49
Operating lease liabilities	83
Long-term debt	3
Deferred income tax liabilities	37
Other liabilities	6
Total identifiable net assets at fair value	823
Goodwill	679
Total consideration	1,502
Consideration satisfied by:
Cash payments	1,501
Contingent consideration	1
Total consideration	1,502
Acquisitions of businesses, net of cash acquired
Cash consideration	1,501
Less: cash and cash equivalents acquired	(7)
Total outflow in the Consolidated Statements of Cash Flows	1,494

As a result of the 2021 acquisitions, the Company recognized $131 million of amortizable intangible assets and $679 million of goodwill. Goodwill represents the excess of the consideration paid over the fair value of net assets acquired and includes the expected benefit of cost savings and synergies within the Company’s segments and intangible assets that do not qualify for separate recognition. Of the Goodwill recognized in respect of the acquisitions completed in 2021, $284 million is expected to be deductible for tax purposes. The amortizable intangible assets will be amortized against earnings over a weighted average of 8 years.

Acquisition-related costs

Acquisition-related costs have been included in Selling, general and administrative expenses in the Consolidated Statements of Income. These costs include legal and consulting expenses incurred in connection with acquisitions completed during the applicable period. The Company incurred the following acquisition-related costs for the years ended December 31, 2023, 2022, and 2021:

in $ millions	2023	2022	2021
Acquisition-related costs
Barrette	–	27	–
Other acquisitions	10	12	13
Total acquisition-related costs	10	39	13

The financial information regarding the acquisitions included in the Company’s Consolidated Statements of Income from the date of acquisition through December 31 were:

	Actual from acquisition date
in $ millions	2023	2022	2021
Revenue	228	761	524
Net (loss) income attributable to CRH plc	(15)	(18)	38

Pro forma results of operations for the acquisitions have not been presented because they are not material to the Consolidated Financial Statements.