Construction aggregates producer Vulcan Materials Company (Birmingham, Alabama, USA) has entered into a definitive merger agreement with U.S. Concrete, Inc. (Euless, Texas, USA), a supplier of aggregates and ready-mixed concrete. Under the terms of the agreement, Vulcan will acquire all shares, including both issued and outstanding, of U.S. Concrete common stock for a purchase price of $74.00 per share in cash, which represents a total equity value of $1.294 billion. The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2021, subject to shareholder approval and other customary closing conditions.
According to Vulcan, U.S. Concrete complements the company’ existing footprint by operating in large, attractive metropolitan areas, including 27 aggregates operations serving California, Texas, and the Northeast that shipped 12.6 million tons in 2020. The acquisition of U.S. Concrete's portfolio represents a natural addition to Vulcan's business by providing strategically oriented ready-mixed concrete operations that are expected to expand Vulcan's service capabilities.
In addition, the transaction also accomplishes the following goals for Vulcan: it complements the company’s existing aggregates business in California with access to blue-water source of high quality aggregates reserves; enhances Vulcan's position in key Texas growth areas; and expands the company’s aggregates footprint, including in the attractive New York and New Jersey metropolitan areas. Vulcan also expects the acquisition to increase the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) by approximately $190 million before synergies; and is expected to be accretive to Vulcan's earnings per share in the first full year following closing.
“U.S. Concrete is an important Vulcan customer in a number of key areas, and this transaction is a logical and exciting step in our growth strategy as we further bolster our geographic footprint,” says Tom Hill, chairman and CEO of Vulcan. “Ronnie Pruitt [president and CEO of U.S. Concrete] and his team have done an excellent job growing and operating its business, and we look forward to welcoming the U.S. Concrete employees to the Vulcan family. This is a merger of two corporate cultures that value people, technology, operating disciplines, customer service and the entrepreneurial spirit, and it positions Vulcan to further drive sustainable, long-term shareholder value.”
“Today's announcement that we are combining with Vulcan, a leading producer of construction aggregates, marks a major milestone in U.S. Concrete's history,” says Pruitt of U.S. Concrete. “We are proud of the work our team has accomplished over the past few years to achieve operational excellence and serve our customers and believe combining with Vulcan will provide us with the opportunity to build on our progress. Our combined organization will share an extensive and successful track record of acquisitions and greenfield development, and we look forward to working with Tom and the entire Vulcan family to close this transaction and integrate our two strong businesses.”
Source: Vulcan Materials Company, https://ir.vulcanmaterials.com.