CRH has bought US materials group, Thompson-McCully, for up to €413 million (£325 million), making it the third largest acquisition in its history. The deal is also the third for CRH in the past six days and brings the total amount spent on acquisitions this year to €1.3 billion. CRH finance director, Mr Harry Sheridan said the acquisition was very important to the group. As its biggest US purchase, it opened up a new front in the mid-west and was in line with the company's policy of having a "significant presence in selected areas". The acquisition, he added, would provide CRH with a "new platform for growth in the mid-west".

The structure of the deal comprises a consideration of €333 million plus deferred consideration with a net present cost of €80 million payable over five years. The assets rather than the company have been acquired. The consideration is effectively allowable for tax, making it very tax efficient.

CRH said the fair value of the net assets being acquired was estimated at €265 million.

Thompson-McCully, founded in 1959, has its headquarters near Detroit. CRH said it was the leading integrated aggregates, asphalts and paving contractor in Michigan. Its operations include a major quarry near Detroit together with 13 active sand and gravel pits and 11 modern asphalt plants serving the major metropolitan areas of southern Michigan. Thompson-McCully has developed one of the largest bitumen terminals in the US and is a leader in high specification polymer asphalts, according to CRH.

Like the two US acquisitions announced on Monday, Thompson-McCully is set to benefit from the increased federal highway funding provided under the US Transportation Equity Act for the 21st Century, with a projected 61 per cent increase in average funding levels for 1998/ 2003 compared with 1992/97.

This, CRH said, was supplemented by an additional four cents per gallon state gasoline tax introduced in 1997.

The business has aggregate reserves of more than 200 million tons. In 1998, four million tons of aggregates and six million tons of asphalt, were produced. Sales last year amounted to $254 million (€250 million) while adjusted trading profits, after depreciation, amounted to $45 million. It had had a good profit record in the last few years but, in line with the experienced of others in the field, had a difficult time three to four years ago, said Mr Sheridan.

He said the benefits from acquisitions made by the US company would not be seen until this year and these should add $18 million to sales. "We are looking at a company with sales of around $300 million." On an annualised basis, the acquisition is expected to add 8.5 cents to cash-flow per share, four cents to earnings before goodwill and 2.7 cents to earnings after goodwill. Gearing will be around 75 per cent but Mr Sheridan noted the interest cover would be between six and seven times while interest would be covered between nine and 10 times by profit before depreciation.

Mr Bob Thompson, founder and chief executive of Thompson-McCully, will continue to run the business as a standalone unit within CRH's US subsidiary, the Oldcastle Materials Group. Commenting on the deal, Mr Liam O'Mahony, Oldcastle's chief executive officer and CRH's chief executive designate, said it supplemented Oldcastle's "strong materials presence in the north-eastern and western states".