Eagle acquires two Lafarge plants
Eagle Materials, a major cement and gypsum supplier, agreed to buy cement plants and a variety of related businesses from Lafarge North America.
The purchase price of $446 million is expected to be funded primarily by borrowings under Eagle’s existing bank credit facility, with the remainder funded by the proceeds of an equity offering, the company said.
Under the deal, Eagle Materials will acquire Lafarge’s Sugar Creek, Mo., and Tulsa, Okla., cement plants. It will also take over six distribution terminals, two aggregate 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 supply low-cost alternative fuels to the acquired operations.
The acquisition will increase Eagle’s U.S. cement capacity by roughly 60%, the company said.
The transaction is expected to close in November or December 2012, pending regulatory approvals.
“Our stated strategy has been to grow the cement and aggregates side of our business,” said Steven Rowley, Eagle Materials president and CEO. “Our first priority 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.”
Eagle had net sales of $495 million in 2012, 31% of which was in the cement business.