July 10, 2013
Recent deal activity continued with the same themes we have seen in the last few years — corporate divestitures for balance sheet management and small strategic bolt-on deals by the sector’s major producers. Vulcan Materials and Lafarge S.A. continue to divest of non-core assets in an effort to reduce debt, while Oldcastle continues its charge of smaller strategic bolt-on acquisitions.
Vulcan Materials, as part of ongoing efforts to divest its non-core assets, has sold its remaining quarry assets in Wisconsin to Lannon Stone Products and Payne & Dolan, Inc. Lannon Stone Products acquired the Sussex operations, and Payne & Dolan, Inc. acquired quarries in cities of Franklin, Dousman and Racine.
Lone Star Funds agreed to acquire North American gypsum assets from Lafarge S.A. at an enterprise value of $700 million. In 2012, these operations generated sales of $310 million.
Alexander & Baldwin, Inc. will acquire Grace Pacific Corp. for $280 million, including the assumption of projected net debt of approximately $42 million. The purchase price will consist of 85 percent in the form of Alexander & Baldwin common stock and 15 percent in cash. Grace also owns and operates Mid Pac Petroleum, a fuel distribution and retailing company, which will be spun off to Grace’s existing shareholders prior to the close of the transaction. Grace Pacific engages in the construction and maintenance of roads and highways, asphalt paving and the production and supply of hot-mix asphalt and construction aggregates. Grace Pacific was founded in 1931 and is based in Kapolei, Hawaii.
CRH announced that it had invested approximately €178 million ($229.3 million) on 12 transactions with deals in the materials, products and distribution divisions in the Americas in the first half of the year. The purchases include Modern Precast Concrete in Pennsylvania, Dutchess Quarry and Supply Co. in New York and reserves near Ann Arbor, Michigan, and Thomasville, Pennsylvania.
Brazil’s largest cement producer, Votorantim Cimentos, has canceled its multibillion-dollar initial public offering due to worsening market conditions. The IPO was expected to raise as much as $4.7 billion in shares offered both on the BM&FBOVESPA in São Paulo and the New York Stock Exchange.
George H. Reddin is a principal in FMI’s Investment Banking practice. He can be reached at 919-785-9286 or firstname.lastname@example.org.