Rock Products

JAN 2018

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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28 • ROCK products • January 2018 national average for the next 12-18 months in the San Fran- cisco Bay area, the Dallas-Ft. Worth metroplex and the five boroughs of New York City." At the end of Q3 2017, U.S. Concrete announced the acquisi- tion of Polaris Materials, an aggregate supplier in the Western U.S. At the beginning of Q4 2017, U.S. Concrete announced two acquisitions in Northern California and one in Philadel- phia to expand its ready-mixed concrete operations. CRH plc reports on a semi-annual basis and reported interim results in August 2017. The company is 2 percent ahead of 2016 sales, 5 percent ahead of 2016 EBITDA, and 29 per- cent ahead of 2016 EPS. During the first half of 2017, CRH spent approximately $720 million on 13 acquisitions. Eleven of the acquisitions were in the Americas, eight of which were bolt-on acquisitions includ- ing one of the largest privately held aggregate producers in the U.S., Mulzer Crushed Stone Inc., an operator of six quar- ries, five sand and gravel operations, 14 aggregates yards, four ready-mixed concrete plants and three asphalt plants. In August 2017, CRH divested Beacon Roofing Supply for total consideration of $2.63 billion in line with the company's strategy to divest the Americas distri- bution business. The company quickly redeployed the capital for the purchase of Ash Grove Cement Co. in September 2017. Transaction Spotlight CRH plc and Ash Grove Cement Co. announced that they have entered into a definitive agreement under which CRH will acquire Ash Grove for $3.5 billion. The transaction is expected to close in late 2017 or early 2018. Ash Grove is the fifth largest cement manufacturer in the U.S. and operates eight cement plants located throughout the Midwest, Texas and the Western U.S. Additionally, Ash Grove operates 52 ready-mixed concrete plants, 25 sand and gravel plants, 20 limestone quarries, and nine packaged products plants. CRH and Ash Grove have maintained a four-decade long busi- ness relationship, and CRH represents Ash Grove's largest customer. This acquisition further boosts CRH's dominance in concrete and aggregates in the U.S and the deal has sig- nificant potential for realized synergies. Construction Materials Construction input prices remained unchanged in October and are up 4.3 percent on a year-over-year basis, according to an Associated Builders and Contractors (ABC) analysis of data recently released by the U.S. Bureau of Labor Statistics. "The construction industry benefited from a one-month reprieve in materials price increases in October, based on today's release. The fact that materials prices have stabi- lized should be viewed as good news to the U.S. construction industry," said ABC Chief Economist Anirban Basu. "Most stakeholders agree that labor costs will continue to rise as America hurtles toward full employment. Significant increases in materials prices would further squeeze con- struction firms' profits margins, or alternatively would make it less likely that planned construction projects would move forward." Aggregates Materials Industry results in Q3 2017 showed slight increases in volume compared to the same period in 2016 for cement (1.6 percent) and sand & gravel (2.7 percent) while crushed stone volume was down 1.3 percent. Asphalt prices contin- ued to increase in Q3 and climbed 4.5 percent compared to Q3 2016 prices. Aggregate Industry Market Report Sources: U.S. Geological Survey, Average of Vulcan Materials, Martin Marietta and Eagle Materials average net selling price Sept. 20, 2017 Announced Definitive Agreement to Acquire

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