Officials from Longleaf Partners Small-Cap Fund in Providence, R.I., have disclosed a 12.7 percent stake in Dallas-based Texas Industries Inc. Affiliated
Officials from Longleaf Partners Small-Cap Fund in Providence, R.I., have disclosed a 12.7 percent stake in Dallas-based Texas Industries Inc. Affiliated with Memphis-based Southeastern Asset Management, Longleaf Partners promotes investment in undervalued companies. With a market capitalization of about $1.2 billion, TXI is the largest publicly held cement operator in the U.S., and seventh largest domestic powder producer. A 2001-2007 expansion program for its Texas and California mills will see annual capacity climb from 5 million to 7.5 million tons.
The company’s appeal to investors stems from strong powder positions in those high-growth states, which combined account for nearly 25 percent of U.S. powder consumption, and a recent Chapparal Steel spin off. TXI’s portfolio includes integrated ready mixed operations in Texas, which during the past 18 months has seen more than $500 million worth of properties change hands in transactions and asset swaps involving Southern Star Concrete (Dallas-Fort Worth and Houston); Campbell Concrete and Materials (Houston); Go-Crete Corp. and Redi-Mix L.P. (Dallas-Fort Worth); and Ingram Enterprises (Brownwood). Valued at about $145 million, Longleaf Partners’ TXI holding joins the $2.9 billion Small-Cap Fund. A second product, the Longleaf International Fund, lists an approximately $150 million position in Cemex S.A., whose principal U.S. markets include Texas and California.