Rock Products

OCT 2012

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IN THE KNOW Eagle Materials Acquires Quarries Eagle Materials Inc. entered into a definitive agreement with Lafarge North America to purchase Lafarge's Sugar Creek, Missouri and Tulsa, Okla., cement plants, as well as related assets, which include six distribution terminals, two aggregates quarries, eight ready‐mix concrete plants and a fly ash business. Eagle will also enter into a transition sales agreement to supply certain Lafarge operations with cement for four to five years, and an agreement with a Lafarge affiliate to sup‐ ply low‐cost alternative fuels to the acquired operations. The purchase price is $446 million, subject to customary post‐closing adjustments. Trailing 12‐month revenues through June 30, 2012, for the cement plants and related assets were $178 million. The acquisition will increase Eagle's U.S. cement capacity by roughly 60 percent. The transaction is expected to close in November or December 2012, pending regulatory approvals. Steven Rowley, Eagle Materials Inc. president and chief executive officer, said the agreement represents a major milestone event for the company. Study: Canada's Infrastructure at Risk Canada's municipal infrastructure is at risk, with more than half of municipal roads requiring significant repairs and one in four wastewater plants needing major up‐ grades. This was the key finding of the first‐ever Canadian Infrastructure Report Card, a major study released by the Federation of Canadian Municipalities (FCM) and three in‐ dustry partner organizations. More than half of municipal roads require significant repairs and one in four wastewater plants need major upgrades. "The report card shows that core municipal infrastructure like roads and water systems, assets critical to Canada's health, safety and economic prosperity, are at risk," said FCM President Karen Leibovici, speaking at a news con‐ ference in Ottawa. "Investments in infrastructure over the last few years have helped, but without long‐term action we are still headed for a crisis." The report card, which surveyed more than 120 munici‐ palities representing 60 percent of the Canadian popula‐ 10 ROCKproducts • OCTOBER 2012 tion, says more than half of municipal roads are falling apart. One‐in‐four roads is over capacity, transporting far more people and goods than it was designed to handle. And one in four wastewater treatment plants needs to be upgraded or replaced to meet new federal standards in‐ troduced this summer, at a cost of at least $20 billion. Without immediate improvement and ongoing mainte‐ nance, the cost of fixing or replacing the assets studied will explode over the next decade. "Two billion dollars in federal funding for local governments is going to lapse by March 2014," Leibovici said. "The new federal long‐term infrastructure plan is a once‐in‐a‐generation opportunity to put our essential infrastructure back on solid ground. Municipalities are ready to work with all partners – fed‐ eral, provincial, territorial, and the private sector – to fix the problem once and for all." The FCM partnered with the Canadian Construction Asso‐ ciation, the Canadian Public Works Association and the Canadian Society for Civil Engineering to deliver the re‐ port card. This marks the first time a group of national stakeholders worked together to measure the state and performance of municipal infrastructure from one end of Canada to the other. www.rockproducts.com Deal includes cement plants, six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business. "Our stated strategy has been to grow the cement and ag‐ gregates side of our business," Rowley said. "Our first pri‐ ority has been to acquire cement plants that connect but do not overlap with the market reach of our existing plants. These two high‐quality Lafarge cement plants are a compelling fit with our objectives – and the transaction meets our stringent criteria for new investment. These as‐ sets will allow us to participate more fully in the U.S. con‐ struction industry recovery; additionally this transaction further positions the company near energy growth mar‐ kets where there is growing demand for our specialty oil well cement along with our newly offered high‐quality northern white frac sand. These new cement, concrete and aggregates assets will immediately contribute earn‐ ings and cash flow for our stockholders; moreover, they will provide significant near‐term opportunities for syner‐ gies and earnings growth." CANADA FAST FACT PRODUCER NEWS FAST FACT

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