Çimsa to Acquire 94.7% Stake in Mannok Holdings

Çimsa, a company from the Sabancı Group, continues to successfully implement its three-pillar transformation strategy defined as "From Cement to Building Materials," "From Local to Global," and "From Grey to Green," taking an important step to strengthen its global footprint. Having incorporated Spain-based Bunol into its portfolio in 2021 and having started investment in a new grey cement grinding plant in the United States in 2023, Çimsa has now signed an agreement to acquire 94.7% of the shares of Mannok Holdings DAC, one of Europe's leading building materials producers based in Ireland.

Çimsa, a company from the Sabancı Holding Materials Technologies Group, continues its efforts to strengthen its global footprint through inorganic growth steps. Having strengthened its position in the white cement sector with Spain-based Bunol, which it incorporated into its portfolio in 2021, Çimsa took an important step with its United States investment announced in 2023 to expand its global production network. Continuing its international investments to diversify production geography, expand its product portfolio, and strengthen local and global supply chains to provide proximity to customers and markets, Çimsa has now reached an agreement to incorporate Mannok Holdings DAC (Mannok), one of Ireland's and Europe's leading building materials producers, into its portfolio.  

MORE THAN 50 YEARS OF EXPERIENCE IN THE EUROPEAN MARKET

According to the acquisition agreement signed between the parties, Mannok's 94.7% shareholding will be transferred to Cimsa Ireland Ltd, a 100% subsidiary of Sabanci Building Solutions BV (SBS), Çimsa's affiliate, following the completion of required approval processes. Mannok's total company value is EUR 330 million, and the final share purchase price corresponding to 94.7% of the capital will be determined after deducting financial debt at the closing date and making other adjustments. 

Mannok, which has more than 50 years of experience in the European market, operates in two main business segments: building materials and packaging products. With its headquarters in the Republic of Ireland and significant presence in the United Kingdom, Mannok is among the companies with the widest product range in building materials, manufacturing and selling cement, cement-based products (such as tiles, precast, concrete), insulation materials, and recycled plastic packaging. Mannok employs more than 800 people. 

According to unaudited financial statements, for the 12-month period ending 30 June 2024, Mannok achieved consolidated net sales of EUR 293.7 million and EBITDA of EUR 57.5 million. The company has production facilities in the Republic of Ireland and Northern Ireland; and sales and distribution networks in the Republic of Ireland, Northern Ireland, and England. 

FROM CEMENT EXPORTING COMPANY TO GLOBAL BUILDING MATERIALS COMPANY

Cenk Alper, CEO of Sabancı Holding, in his comments on the matter, emphasized that Çimsa has strengthened its global footprint through recent steps, stating: "We are extremely pleased that our Group companies have set out with the vision we have established as 'The World's Sabancı' and continue to 'run without boundaries' in production and innovation. Çimsa is one of our leading companies in this race. Until recently, Çimsa was described as one of Turkey's cement exporting companies; through its 'beyond cement' investments in countries such as Spain, the United States, and Germany, it has now transformed into a global building materials company. The Mannok investment will be one of the important pieces of this transformation. On the other hand, in all of our inorganic growth steps, our primary condition is that our new investments serve sustainability. For Sabancı, this has now become an investment criterion that goes beyond any kind of financial benefit and has become part of company culture. Meanwhile, we will continue to prioritize investments that will expand our international customer portfolio in the coming period. The agreement signed by Çimsa fully meets both of these investment criteria that we as the Sabancı Group are following." 

WILL PROVIDE MARKET DIVERSIFICATION OPPORTUNITY FOR HIGH-QUALITY PRODUCTS LIKE CAC

Burak Orhun, Head of Sabancı Holding Materials Technologies Group, highlighting that the Mannok acquisition is 100% aligned with Çimsa's transformation strategy, stated: "This transformation strategy that we have defined as 'From Cement to Building Materials,' 'From Local to Global,' and 'From Grey to Green' consists of three pillars. The first is to add non-cement products to our portfolio while enriching cement with higher value-added products. Through investments we have implemented recently, today we have become the world's second-largest white cement producer. With the additional investment we completed at our Mersin facility in recent months, we are among the top three producers globally in calcium aluminate cement (CAC), which we position as a building chemical. Now, with the Mannok acquisition, we are expanding our product range in insulation products and advanced building materials. Our second strategic priority is to strengthen our global footprint. In this direction, we are developing global-scale but locally-rooted competencies to get closer to our customers around the world and be their solution partner. This investment we will make in Ireland will enable us to establish new customer connections in the United Kingdom geography and also provide us with a market diversification opportunity for our high-quality products like CAC. And finally, the third pillar of our strategy is to turn our product portfolio from grey to green. At this point, in addition to our cement products, we view it as a responsibility to the world to add products to our portfolio that have lower carbon intensity in production and higher sustainability impact in their life cycle."

AIM TO RAISE FOREIGN CURRENCY-BASED REVENUE SHARE ABOVE 70%

Umut Zenar, CEO of Çimsa, emphasizing that the Mannok acquisition will bring Çimsa new competencies in many respects, stated: "The grey cement investment in the United States that we announced last year and whose construction is ongoing today, we plan to put into operation in the fourth quarter of 2025. With the completion of the Mannok acquisition, the grey cement plant within Mannok will hold the distinction of being Çimsa's first grey cement plant outside Turkey. Particularly regarding technology transfer, our Mannok facility and our production centers in Turkey will operate in great synergy; we will collaborate in the use of different technologies, particularly in the use of alternative fuels. On the other hand, with the completion of the acquisition, we aim to raise the share of our foreign currency-based revenues in our total revenues above 70%. This will not only open the door for Çimsa to make much longer-term plans, but will also create an important advantage for our company in terms of balance sheet quality and dealing with financial uncertainties." 

WE ARE A COMPANY SETTING GLOBAL STANDARDS IN ALTERNATIVE FUEL TECHNOLOGY

Umut Zenar, recalling that Mannok is not only a building materials producer but also has extensive experience in packaging products, said: "Çimsa has today become a company in its sector that, particularly in alternative fuel use, is not following existing technologies but setting global standards in this area. Mannok's competencies in the packaging business segment and its recycling experience spread across the United Kingdom will significantly increase our use of alternative fuels in cement production. We will reach our alternative fuel use targets much sooner thanks to this investment—targets we had at the 30% level in 2023 and want to reach 40% by 2030. On the other hand, with the global sustainability-focused changes and the transition from linear economy to circular economy accelerating, we will integrate packaging recycling into our cement and building materials production processes, thereby showcasing one of the best examples of circular economy at global scale in our sector."

FOLLOWING 'SCIENTIFIC' ROADMAP IN SUSTAINABILITY

Mannok, among the most committed companies in the European market regarding sustainability targets, has achieved 59 million kilowatt-hour energy savings at its grey cement plant by early 2024 through efficiency investments it began in 2017. Having published its 2030 Sustainability Strategy recently, the company, like Çimsa, follows an emissions reduction plan aligned with the "Science Based Targets initiative" (SBTi) regarding sustainability targets. On the other hand, like Bunol, which joined Çimsa's portfolio in 2021, Mannok's cement operations also fall within the European Union Emissions Trading System (EU ETS). This provides Çimsa with an opportunity for synergy in the joint management of all emissions from its overseas production operations.