I have no position here but do rate JHX as a success story in the US, being in a structural growth market with a large dollop of cyclicality, which we can see in its numbers.

JHX have acquired AZEK an outdoor flooring company, and is a large acquisition of about 50/50 cash/scrip and will comprise about 25% of the total company, so big. could be classed as an adjacency.

JHX is pointing out large synergies of about $350m on a combined $1.5b of EBITDA to justify the deal, ie, 23% -is a stretch, imo. those synergies are 2/3 other (revenues?) and 1/3 costs. Historically i get a bit uncomfortable at those numbers and mix.

Ive never heard of AZEK, not surprising the US is huge. ive put together a CFO-capex/cap employed for both below. AZEK was IPO's in 2020.

First up JHX, average 20% over the last 5 years which is a good number. the cyclicality is apparent, but overall strong business.

Now for AZEK, an average of 4% over the last five years with a big increase in the last two years. the big question is the improvement sustainable? start of a trend or an ST move? will be critical to JHX.

After the recent poor REH news with its big US acquisition, even good mgt teams can be caught out in the US. I'm sceptical at this stage and would be reducing my buy targets for JHX.

would love to know why the AZEK guys sold, of course, we will likely never get the full story here. draw your own conclusions.

All data was sourced from Seeking Alpha for AZEK and company reports for JHX.