Construction forecast holds promise, highways remain flat
Earnings reports from the construction aggregate sector show that there is improvement in the economic and construction industry fundamentals that drive demand for crushed stone, sand, and gravel. Data on housing starts and private non-residential construction continues to be positive, leading to continued increases in aggregate shipments. The demand from highway construction remains flat; however, the debate on federal funding is once again heating up in Congress.
The outlook for the construction aggregates sector is as positive as it has been since the collapse of the financial sector in 2008, which should be encouraging for merger and acquisition activity in the construction materials sector.
Lafarge North America acquired assets from the New Orleans division of Metro Materials, Inc., headquartered in St. Louis, Mo. The acquisition involves Metro Material’s New Orleans assets, which include its two ready-mixed concrete plants and associated trucks and equipment.
U.S. Concrete, Inc., through its wholly owned subsidiary, Redi-Mix Concrete, LLC, acquired ready-mixed concrete assets of Bodin Concrete, L.P., headquartered in Rowlett, Texas. The acquisition includes three ready-mixed concrete plants located in Wylie, Rockwall, and Forney, Texas, which will add to the company’s existing operations in the Dallas/Fort Worth area.
Santrol Inc. has agreed to acquire sand mining operations, resin-coating plants, and distribution terminals of FTS International, Inc. FTS International, Inc. provides oil and natural gas well stimulation services to the exploration and production companies operating in the United States. It offers high-pressure hydraulic fracturing services. Santrol Inc. provides proppants for wellheads worldwide. The company was founded in 1976 and is based in Fresno, Texas. Santrol Inc. operates as a subsidiary of Fairmount Minerals Ltd.
American Roads LLC, based in Detroit, Mich., has filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court. American Roads LLC owns and operates toll road facilities in the United States and Canada. It operates toll bridges in Alabama, as well as an international border-crossing tunnel between Detroit and Windsor, Ontario. The company also develops various technologies, including toll systems, mobile payment options, customer surveying services, and traffic monitoring services.
George H. Reddin is a principal in FMI’s Investment Banking practice. He can be reached at 919-785-9286 or at email@example.com.
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