Rock Products

OCT 2016

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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Page 30 of 63 ROCK products • October 2016 • 29 Cemex S.A.B de C.V manufactures and distributes cement, ready-mix concrete and aggregates in more than 50 coun- tries. The company recently reported modest Q2 2016 sales declines in all geographic divisions except for the U.S. and Mexico (which posted 3.0 and 7.0 percent increases, respectively) for an overall 1.0 percent drop in sales versus Q2 2015. Cost reduction initiatives and lower energy costs allowed the company to reduce its cost of sales and ulti- mately still post a 6.0 percent increase in Operating EBITDA. In Q2 2016, Cemex divested of assets in Thailand and Bangla- desh to Siam City Public Co. Ltd. for $53 million. Additionally, on May 2, 2016, Cemex announced an agreement to sell its cement plant in Odessa, Texas, two cement terminals and the building materials business in El Paso, Texas, and Las Cruces, N.M., to Grupo Cementos de Chihuahua for $306 million as part of its plan to sell as much as $1.5 billion in assets by the end of 2017. Select Merger and Acquisition Activity Acquisition activity continued in Q2 2016 as aggregate pro- ducers acquired mineral reserves and completed strategic acquisitions to increase vertical integration and geographic expansion (Figure 2). Summit Materials and U.S. Concrete were active consolidators during the quarter. Private Equity Transaction Activity and Valuations GF Data Resources, a provider of detailed information on business transactions ranging in size from $10 million to $250 million, provides quarterly data from over 200 pri- vate equity firm contributors on the number of completed transactions. Figure 3 provides the number of completed transactions from GF Data contributors, the average EBITDA multiple and the average amount of debt utilized in the transaction computed as a multiple of EBITDA. The data, although not industry specific, does show valuations consis- tent with prior periods but the number of transactions were up from the prior quarter but still below the 67 transactions reported in Q4 2015. Figure 2: Recent Industry M&A Activity Transaction Date Target/Issuer Buyers/Investors Transaction Value ($mm) 06/27/2016 NYCON Supply Corp. U.S. Concrete, Inc. Undisclosed 06/24/2016 Hormigonera Equinoccial Equihormiguera Cia Ltda. Yura SA; Unión Cementera Nacional CEM 7.5 06/24/2016 Four Rivers Mining Co. Ltd. Jamaica Aggregates Ltd. Undisclosed 06/07/2016 ArtGo Holdings Ltd. Maswin International (Hong Kong) Co., Ltd. Undisclosed 06/01/2016 Technicrete Isg Pty Ltd. /Concrete Tile Plant Braas Monier Building Group SA 3.3 05/04/2016 Sierra Ready Mix LLC Summit Materials, Inc. Undisclosed 05/03/2016 Longley Concrete Ltd. /White Concrete division Naylor Concrete Products Ltd. Undisclosed 05/02/2016 (Announced) CEMEX SAB de CV/Cement Plant and 2 Cement Terminals Grupo Cementos de Chihuahua 306.0 05/01/2016 Betomix Oy Lattia-Miredex Oy Undisclosed 04/13/2016 Lenstroidetal OAO /2 Concrete Plants Gruppa Kompanii Monolit LLC 3.0 04/01/2016 LBC Borås AB /Concrete Business Swerock AB Undisclosed 04/01/2016 Strickland Bridge, Inc. U.S. Concrete, Inc. Undisclosed Source: FactSet

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