US$3.2 billion cash and shares transaction creates fourth-largest cement platform in the US
DENVER-based Summit Materials Inc., a leading vertically integrated materials-based company which supplies aggregates, cement, ready-mixed concrete and asphalt in the US and British Columbia, Canada, have successfully completed a US$3.2 billion combination with Argos North America Corp. (Argos USA), the US operations of Cementos Argos SA.
Argos USA are among the largest cement producers by total installed capacity in their areas of operations, which include the Southeast, Mid-Atlantic, and Texas, with their asset footprint comprising four integrated cement plants, approximately 140 ready-mixed concrete plants, and eight ports.
Argos USA have a total installed cement grinding capacity of 9.6 million tons per annum, together with additional import capacity. The combination of Summit and Argos USA will create the fourth-largest cement platform in the US.
Under the terms of the agreement, Cementos Argos will receive approximately US$1.2 billion in cash (around 40% of transaction value) and approximately 54.7 million shares of Summit stock (around 60% of transaction value).
Summit Materials anticipate generating at least US$ 100 million of annual EBITDA synergies, arising from operational efficiencies and combined services, with significant realization within two years.
‘We are excited to begin a new chapter at Summit Materials,’ said Anne Noonan, Summit Materials’ president and chief executive officer. ‘Together, we now have an unrivalled materials-dominant platform featuring significant scale and an advantaged geographic footprint.’
Jorge Mario Velasquez, chairman of the Argos board of directors, added: ‘We are pleased to announce this new partnership with Summit Materials. With the closing of this transaction, Cementos Argos gain a strategic ownership in a materials-led company with national footprint in the world’s biggest market.’