TXI ups concrete capacity nearly 50 percent in Transit Mix deal

Sources: Texas Industries Inc., Trinity Industries Inc.; CP staff

An agreement between two of Texas’ biggest ready mixed concrete operators befits the Lone Star State in scope and strategy: TXI is shedding lightweight aggregate plants in Texas, Colorado and California for 42 ready mixed production and two aggregate distribution sites spanning east Texas and parts of Arkansas, all under Trinity subsidiary Transit Mix Concrete & Materials. The deal positions TXI with 106 ready mixed plants, approximately 3.5 million yards’ production (2012 estimate), and a fleet of 500-plus mixers.

“This transaction will expand [our] ready mix concrete capacity by nearly 50 percent in strong, stable markets,” says TXI Vice President and Chief Operating Officer Jamie Rogers. “It fits our core vertical integration strategy and is timed for both market recovery in this region and capacity addition in our cement plant in central Texas. The Transit Mix employees have built a great business and we look forward to welcoming them to the TXI family.”

The companies’ second asset exchange in as many years marks Trinity/Transit Mix’s exit from concrete. “[It] is a continuation of our strategy to focus on the aggregates side of our business. We have been repositioning the Construction Products segment to align with products that have more consistent demand drivers,” says Trinity Construction, Marine and Parts & Components Group President William McWhirter II. “We remain positive on the underlying infrastructure and construction markets driving long-term demand for aggregates.”

Scheduled for closing by year’s end, the deal nets Trinity subsidiary Trinity Materials Inc. expanded shale and clay aggregate operations in Streetman, Texas; Boulder, Colo., and Frazier Park, Calif.; plus TXI’s DiamondPro processed clay products for baseball fields and brick pavers. Among east Texas Transit Mix concrete plants in the exchange are ones co-located with aggregate operations Trinity Materials gained in an April 2011 concrete-for-aggregate asset swap with TXI. The expanded shale & clay production exit is the latest in a long line of portfolio-streamlining measures for TXI, whose former businesses have included clay brick, concrete block and pipe, and steel.