Vulcan Materials Company, a producer of construction aggregates and U.S. Concrete, Inc., a supplier of aggregates and ready-mixed concrete, have entered into a definitive merger agreement.
Under the terms of the agreement, Vulcan will acquire all of the issued and outstanding shares of U.S. Concrete common stock for a purchase price of $74 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 U.S. Concrete shareholder approval, regulatory clearance and other customary closing conditions.
Headquartered in Euless, Texas, U.S. Concrete operates in large metropolitan areas that complement Vulcan's existing footprint. With 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.
The transaction provides strategically-oriented, ready-mixed concrete operations that will expand Vulcan's service capabilities.
Other highlights include:
- Complements Vulcan'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.
- Expands Vulcan's aggregates footprint, including in the New York and New Jersey metropolitan areas.
- Expected to increase Vulcan's EBITDA by $190 million before synergies.
"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 Materials Company. "Ronnie Pruitt 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."
The Greystone Group is serving as financial advisor to Vulcan. Truist Securities, Inc. is serving as sole lead arranger on committed financing to Vulcan. Wachtell, Lipton, Rosen & Katz and Bradley Arant Boult Cummings LLP are serving as legal counsel to Vulcan. Evercore and BNP Paribas Securities Corp. are serving as financial advisors to U.S. Concrete. Gibson, Dunn & Crutcher, LLP and Akin Gump Strauss Hauer & Feld LLP are serving as legal counsel to U.S. Concrete.
"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 Ronnie Pruitt, president and CEO 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."
