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Holcim makes a strong push into North America by buying a roofing company for $1.29 billion.

Holcim AG, which makes more cement than any other company in the world, has agreed to buy U.S. roofing system maker Duro-Last for $1.29 billion. This is the Swiss company’s latest move to strengthen its presence in North America.

A Holcim (SIX:HOLN) executive told Reuters last month that the company expects the U.S. Inflation Reduction Act (IRA) to give its business in the area a big boost and raise its sales to about half of its business from about 40% at the moment.

Holcim has recently bought other companies in North America. This deal with privately owned Duro-Last is its biggest since it bought residential roofing company Malarkey for $1.35 billion in December 2021.

Related: Strong construction demand boosts Holcim’s sales outlook.

Duro-Last is based in Michigan and sells roofing systems for commercial buildings. Each year, the company makes about $540 million in sales.

The deal is expected to save around $60 million per year, mostly because getting materials will be cheaper. Holcim said that the price of $1.29 billion is equal to 7.9 times EBITDA after taking into account synergies.

It said that because of the purchase, Holcim’s roofing systems division will have more than $4 billion in sales by the end of 2025.

Holcim wants to grow its roofing business, which is part of its Solutions & Products business. This part of the company’s business is more profitable than the rest and uses less carbon than making cement.

In the first nine months of 2022, Solutions & Products had a recurring operating profit margin of 20%, which was higher than the 16% level for Holcim as a whole.

Shares were flat at the start of trading after going up more than 8% in the past year, which was more than the 7.6% drop in the Swiss Market Index.

Analysts were happy about the purchase.

“We are sure that the acquisition will help Holcim reach its goal of having its Solutions & Products business bring in 30% of its revenue by 2025, up from about 19% in 2022.

Related: After a strong first quarter, Holcim increases its full-year sales projection.

Bernd Pomrehn, an analyst at Vontobel, said, “The speed at which Holcim is becoming an asset-light, more innovative, low-carbon construction solutions provider is not yet fully reflected in its valuation.”

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