Rock Products

FEB 2019

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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ROCK products • February 2019 • 33 www.rockproducts.com Our Aggregates Materials Index has significantly underperformed the S&P 500 and the DJIA, declining by 14 percent YTD through Q3. Thus far in Q4 2018, the S&P 500 and DJIA have surrendered all YTD returns while the Aggregate Materials Index has dipped further into the red. M&A Overview Preliminary estimates of total acquisition activity (Figure 3) in Q3 2018 demon- strate a decrease of 7.1 percent compared to the same period in 2017 in terms of the number of aggregates related transactions completed (26) in the U.S. and Canada. Transaction activity was down 27.8 percent compared to Q2 2018, an above average quarter, but overall M&A activity in the sector remains robust. Pub- licly traded aggregates producers were notably active during the quarter including Cemex, LafargeHolcim, U.S. Concrete and Oldcastle. Figure 3: Select Q3 2018 Industry M&A AcƟvity TransacƟon Date Target/Issuer Buyers/Investors TransacƟon Value ($mm) 09/19/18 Palmer Paving Corpora- Ɵon Peckham Indus- tries, Inc. Undisclosed 09/12/18 Blue Star Materials II (Ag- gregates Quarry in Texas) Cemex Undisclosed 09/06/18 Leon River Aggregate Materials U.S. Concrete, Inc. Undisclosed 09/06/18 Fabcon Incorporated Solace Capital Partners Undisclosed 09/03/18 Concrete SpecialƟes, Inc. Oldcastle Infra- structure $46.6 08/31/18 Cajun Ready Mix, Ltd. Ingram Readymix, Inc. Undisclosed 08/20/18 Asphalt Plants & Paving Division of Lane Construc- Ɵon Eurovia (SA) $555.0 08/02/18 Assets of Metro Mix, LLC LafargeHolcim Ltd (SWX:LHN) Undisclosed 07/16/18 Molalla Redi-Mix and Rock Products, Inc. Knife River Corpo- raƟon Undisclosed 07/03/18 Tarrant Concrete Compa- ny, Inc. LafargeHolcim Ltd (SWX:LHN) Undisclosed Sources: FactSet and Capital IQ Private Equity Transaction Activity and Valuations GF Data Resources, a provider of detailed information on business transactions ranging in size from $10 million to $250 million, provides quarterly data from over 200 private equity firm contributors on the number of completed transactions. Figure 4 provides the number of completed transactions from GF Data contribu- tors, the average Total Enterprise Value (TEV)/EBITDA multiple and the average amount of debt utilized in the transaction computed as a multiple of EBITDA. The data, although not industry specific, shows the number of transactions completed rebounded closer to historical norms while average valuation multiples were rela- tively flat and senior debt levels declined slightly. SHAPE www.kpijci.com

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