Cemex S.A.B. de C.V. enters the new year on track to unload a major non-core U.S. asset: the Rinker Materials concrete pipe and precast business. Under a definitive, late-2016 agreement, the producer will sell the entity to Atlanta-based Quikrete Holdings Inc. for about $500 million, plus an additional $40 million depending on future performance.
|PHOTOS: Rinker Materials|
|Rinker Materials affords Quikrete Holdings immediate scale in conventional and value-added drainage products. The latter include Stormceptor, a patented device capturing non-point source pollution in stormwater runoff.|
Rinker Materials has 32 pipe and precast plants in 15 states. It will propel Quikrete Holdings to leadership in the concrete drainage products market, and complement assets the company gains through the acquisition of Ohio-based Contech Engineered Solutions. The agreement includes a license for Quikrete Holdings to use the Rinker brand for concrete pipe and precast.
Cemex will use sale proceeds to reduce debt, which has remained at elevated levels since the 2007 Rinker Group acquisition. That deal greatly strengthened Cemex USA in core ready mixed concrete, cement and aggregates businesses. The Rinker Materials move follows two other transactions—Texas, New Mexico cement, ready mixed concrete assets to GCC of America; an Ohio cement plant, companion terminals to Eagle Materials—Cemex effected last year with an eye to debt reduction and U.S. portfolio streamlining.
GCC CLOSES ON TEXAS, N.M. OPERATIONS
Mexico-based Grupo Cementos de Chihuahua has expanded its North Central and Mountain Region market footprint in the U.S., acquiring Cemex’s Odessa cement plant plus Amarillo and El Paso terminals, all in Texas; and, a construction materials business serving El Paso and Las Cruces, N.M. through eight ready mixed, six aggregate and five asphalt plants, plus five distribution centers. The properties increase GCC’s total headcount to nearly 3,500, and continue in a ‘business as usual’ mode under their new owner.
“This acquisition is a significant step forward in our Sustainable Growth strategy,” says GCC CEO Enrique Escalante. “With these assets and new employees, we will strengthen our competitive advantage, increase our portfolio of products and improve our operations by sharing best practices.”
“By acquiring these operations, we greatly expand our reach in the mid-section of the United States, which means more customers will benefit from a broader and richer distribution network and a more nimble, responsive approach to customer service,” adds Ron Henley, president of Denver-based GCC of America. “We work hard to be recognized for our quality products and service, and the account management we provide, [and] are committed to maintaining that reputation at every location.”