Summit Materials announced signed a definitive agreement with Lafarge North America (“Lafarge NA”) to acquire Lafarge NA’s 1.2 million short ton (1.1 million metric ton) capacity Davenport, IA cement plant and seven cement distribution terminals (“Davenport Assets”) for $450 million. The transaction is subject to certain post-closing adjustmentsSummit’s Bettendorf, Iowa cement distribution terminal. The transaction is expected to close in July 2015, after final regulatory approval and the closing of the Lafarge-Holcim global merger.
The Davenport Assets will be combined with Summit’s Continental Cement Company business based in Chesterfield, MO. The businesses will have 2.45 million short tons of cement capacity which are from two plants in Hannibal, MO and Davenport, and eight cement distribution terminals along the Mississippi River from Minneapolis, MN to New Orleans, LA.
Summit CEO, Tom Hill, commented, “The Davenport Assets are an excellent fit with our materials-based growth strategy and a continuation of Summit’s proven track record of value-added acquisitions. The combination of the Davenport Assets and Continental Cement creates a strategically compelling and complementary multi-plant cement business in very attractive markets along the Mississippi. We are looking forward to welcoming the Davenport plant and terminal employees to Summit, and to servicing new and existing customers with high quality product from our expanded cement operations.”
Furthermore, the transaction stated that the purchase price of $450 million is expected to be funded by Summit Materials with a combination of debt and equity.
Summit hosted a conference call at 11:00 am eastern time (9:00 am mountain time) on April 17, 2015 to further discuss the contents of the transaction.
About Summit Materials
Summit Materials was created to acquire and improve heavy-side building materials companies in various construction industries such as aggregates, ready-mix concrete, cement, asphalt paving and so on. Summit Materials partner with established local businesses and is committed to creating value, provide access to growth capital, implement best practices, and provide a safe place to work while striving to exceed the company’s environmental and social responsibilities. Summit Materials stock market evolution: http://www.marketwatch.com/investing/stock/sum
About Tom Hill
Tom Hill is the Chief Executive Officer and founder of Summit Materials. Tom was Chief Executive Officer of Oldcastle from 2006 to 2008. Oldcastle was one of the world’s leading building materials companies based in Dublin, Ireland. Tom served on the CRH Board of Directors from 2002 to 2008. Tom also held a variety of leadership roles in the transportation industry with the most prominent one as Chairman of the American Road and Transportation Builders Association from 2002 to 2004. He helped develop legislative proposals to address the transportation infrastructure and testified before the US Congress on the need for increased Federal investment in transportation infrastructure. Tom received his MBA from Trinity College in Dublin, Ireland in 1980. He received a Bachelor of Arts in Economics and History from Duke University in 1978.
Lafarge is a French industrial company that produces three major products: cement, construction aggregates, and concrete. It is a world leader in building materials. The group conducts its operations through more than 1,000 subsidiaries, out of which 82% are consolidated. To improve its gypsum assets and the fundamental changes to its management structure, the group has fully refocused on its core businesses of cement, aggregates and concrete. This change will accelerate growth and innovation of the company. Lafarge has an organizational structure according to its three divisions along with decentralized local operations and strong corporate expert departments, which are involved in strategic decisions. Lafarge has 155 cement plants in 56 countries. When it comes to aggragates and concrete there are 141 production sites and sales offices in 37 countries. Lafarge has headquarters in Paris, France.
On April 7, 2014, Lafarge and Holcim partnered into what was called a “merger of equals”.The merger was all about Lafarge stock being converted into Holcim stock on a 1:1 basis. Former Holcim shareholders would own 53% of LafargeHolcim. The new company would be based in Switzerland and have a manufacturing capacity of 427 million tons a year would vastly exceed the 227 million ton capacity. Anhui Conch is the current industry leader in that category. Lafarge Chief Executive Officer Bruno Lafont and Holcim’s Chairman Wolfgang Reitzle will be co-Chairmen of the new Group. Executives from both companies said the deal would save the new company 1.4 billion euros annually and create “the most advanced group in the building materials industry.” Lafarge stock market evolution: http://www.marketwatch.com/investing/stock/laf
About Continental Cement Company
Continental Cement Company is a privately held, American-owned cement manufacturer. It has a single manufacturing facility located south of Hannibal, MO along with additional distribution facilities in St. Louis, MO and Bettendorf, IA. Continental Cement Company headquarters are in Chesterfield, MO.