Clay building material and refractory manufacturing

Two unlike businesses share this code. Nearly half of the 97 Canadian establishments — 46 of them — have one to four employees [A]: studio potteries and small ceramic makers, craft businesses limited by the maker's hands and not examined further. The industrial end is clay brick and refractories: a shale pit, a tunnel kiln that runs continuously, and a product that goes on the front of houses. The attraction is real — brick is heavy, so imports are limited, and Wienerberger, which holds the number one position in Ontario, calls it Canada's most attractive and dynamic real-estate market [A]. The cut is what existing kilns are worth. When Wienerberger bought Meridian Brick, the largest US clay facade maker by capacity and strong in Ontario, it announced $250M for a business with more than $400M of revenue, 20 plants and over 1,000 employees, and closed at a final cash price of $230M, recovering a further $23M for the plants the US Department of Justice made it divest [A]. That is under 0.6 times sales for the kilns, the clay reserves and the working capital together — one transaction clearing well below what the capacity would cost to build, because housing starts swing and a continuous kiln's gas bill does not. A new plant has to earn a return on new-build cost while competing against an owner who bought in at that price. Brampton Brick, the listed Ontario maker, left the other way: family holding companies of its own chief executive and a director bought it out at $12 a share [B] — a price for the equity, not for capacity. The 327 record cuts ready-mix and aggregates on the permit; brick shares the pit-permitting problem, but here it is the second reason, not the first.