Saint-Gobain is poised to acquire Canada’s Xypex, a deal that will make it the market leader in crystalline waterproofing admixtures for concrete. While Xypex doesn’t have the billion-dollar price tag to grab headlines, the purchase says a lot about where the French supplier of insulation, glass and other building materials sees its place in the hotly contested construction chemicals market.
The world of construction chemicals has become something of a broad church as paint makers, cement manufacturers, chemical groups, building suppliers — you name it — all converge on this market spanning silicone cartridges to adhesives, screeds and waterproofing.
With around EU50 billion in turnover and an R&D budget of EU100 million, Saint-Gobain would have the means to become an all-encompassing one-stop shop in construction chemicals to rival market leader Sika. It is, however, taking a more measured approach, largely remaining within its wheelhouse of weather resiliency and infrastructure, and not branching out into the kind of Unibond adhesive cartridges and plethora of other consumer products that line the shelves of home-improvement stores.
“We are not trying to be like a Sika or Mapei. We have our own DNA,” Steve Williams, President of Construction Chemicals for North America, said in an interview with chemicalESG. “A paint business may try to move into intumescent coatings.
“I think there is probably room for growth for different companies. Construction chemicals is a broad market. Up until this point, I have been mostly focused on the cement and concrete part but there are adjacencies,” where the company could expand, he added.
Williams sees significant opportunities opening up with sustainability amid the move away from traditional organic chemistries for concrete, such as ligno sulfates, towards polymer-based formulations and non-traditional binders like calcined clays, blended limestone cements and other cement alternatives that can address issues like the lack of quality sands to make concrete.
The executive has direct access to Saint-Gobain’s centralized R&D funds: his division is currently hiring as it innovates in admixtures to capture growth in alternative low-CO2 cements and binders. The emphasis is on data centers, bridges, airports, and other infrastructure to lessen the company’s exposure to residential construction. Sika expects double-digit growth in flooring, waterproofing and roofing solutions for data centers in the next few years.
“We have so many areas of expertise,” Williams said. “The challenge for us is probably how do we focus.”
With Xypex nearly done, Williams is already looking for further M&A targets to expand its range of cement and binder additives as well as adjacencies like water- and fire-proofing. Analysts note that the market remains fragmented despite the ongoing consolidation wave.
He took over as head of construction chemicals in North America in 2022 and over the past decade has watched — and participated in — some of the defining deals in the industry. He spent seven years at Chryso when Saint-Gobain was in the midst of a prolonged and ultimately unsuccessful hostile takeover attempt of rival Sika, which began in 2014 and dragged on for three and a half years.
Williams eventually joined Saint-Gobain in 2022 after the company turned its attention to acquiring Chryso outright in a €1 billion deal with private equity firm Cinven.
At the time, Chryso’s North American business was growing at close to 20% annually.
It turns out, Chryso was just the beginning. Ninety days after that acquisition closed, Saint-Gobain moved again, buying competitor GCP Applied Technologies. The combination transformed its construction chemicals business from a small, niche player into a full-scale platform, further bolstered by the additions of Fosroc, Adfil, and several bolt-on acquisitions.
Though the gap between buyer and seller expectations hasn’t shifted much in the last couple of years, there are still “good opportunities out there” and Saint-Gobain has a “healthy pipeline,” he added.