Colombia’s Grupo Argos S.A. acquired Irving, Texas-based Southern Star Concrete in an early November transaction valued at $245 million. The deal represented
Colombia’s Grupo Argos S.A. acquired Irving, Texas-based Southern Star Concrete in an early November transaction valued at $245 million. The deal represented a three-fold gain in an investment that seller TGF Management, a private equity fund operator in Austin, Texas, had held for 26 months. The Lone Star State’s largest ready mixed producer, Southern Star operates upwards of 50 plants in Houston, the Dallas-Ft. Worth metroplex and Arkansas, running a 500-mixer fleet. Medellin-based Argos is Colombia’s top cement producer, and Latin America’s fifth largest powder player Û behind Cemex, Holcim, Votorantim, and Lafarge.
Southern Star was formed in 2003 from ready mixed operations Hanson Aggregates inherited after its parent company’s 1999 takeover of Pioneer Ltd., Australia. Soon after acquiring the Southern Star properties for $77 million, Texas Growth Fund II sold 13 plants in smaller Texas markets to Transit Mix Concrete & Materials of Beaumont, Texas.
Argos’ adviser on Southern Star, Atlanta-based counsel Kilpatrick Stockton LLP, notes the Southern Star transaction is the largest ever involving a Colombian company and a U.S. property. The deal followed Argos’ recent $12.5 million purchase of a Savannah, Ga., operator, Concrete Express Inc., through its Cementos Caribe business. In addition to its work with Argos, Kilpatrick Stockton advised on a November 2003 transaction in which Raleigh, N.C.-based Ready Mixed Concrete Co. was sold to a management team backed by a Boston private equity firm, Audax Group.