In its annual publication, “Mergers & Acquisitions Advisor Trends in the Engineering and Construction Industry,” investment banking and consulting firm FMI reported, “small, strategic, bolt-on acquisition and corporate divestitures dominated M&A activity in 2014 in the construction materials segment of aggregate, asphalt, and ready-mixed concrete producers.”
According to the report, deals between privately held, middle-market companies were structured to eliminate local competition. Larger, publicly traded companies continued to divest non-strategic operations to raise money for targeted acquisitions.
The most high-profile deals of 2014 included:
The LafargeHolcim “megamerger” was officially announced, resulting in significant divestitures in several countries.
- Cementos Argos bought Vulcan’s Georgia and Florida cement and concrete operations (formerly Florida Rock) in March for $720 million.
- Vulcan then invested $332 million in aggregates facilities and “associated downstream assets” in Arizona, California (including four quarries from West Coast Aggregates), Texas, and Virginia to increase its aggregate reserves by more than 450 million tons.
- Oldcastle Building Products (owned by CRH) announced it would sell its Glen-Gery clay brick operations, including plants in Pennsylvania, Ohio, Virginia, Kentucky, and Iowa. The producer is also selling clay brick and concrete products operations in the United Kingdom.
- Martin Marietta acquired Texas Industries for $2.8 billion, expanding its markets and product lines.
- HeidelbergCement sold its Hanson Building Products business to private equity firm Lone Star Funds for $1.4 billion. The producer will “focus on core products cement and aggregates as well as ready-mixed concrete and asphalt.”