Sources: Elementia S.A.B. de C.V., Mexico City; CP staff
The Elementia board of directors approved a multi-step transaction with Spain’s Cementos Portland Valderrivas S.A., yielding a U.S. cement market stake through Giant Cement Holding Inc. The deal saw a) Elementia pay $220 million for a 55 percent stake and full control of the business; b) Elementia grant Giant Cement a $305 million loan through committed credit lines; and, c) Giant Cement utilize the $525 million infusion to retire 100 percent of its debt.
The latter will reduce financial costs by more than 75 percent, freeing sufficient cash flow to execute investments required to capture opportunities Elementia envisions in the U.S. Giant Cement spans namesake, Dragon Products Co. and Keystone brands, respectively, across South Carolina, Maine and Pennsylvania cement plants, totaling 2.8 million tons/year capacity; six terminals serving New England, New York, Virginia and the Carolinas; three limestone and two sand & gravel operations; and, four waste handling and processing sites. Prior to the transaction, Elementia established a U.S. foothold in the fiber cement siding market, acquiring Georgia-based Plycem USA.
Reflecting on the December 1 transaction, Elementia CEO Fernando Ruiz Jacques noted, “Today marks a major milestone as we successfully enter the U.S. cement market and take another solid step within our inorganic growth strategy. The work of our transition team is already underway to extract the tremendous value we see in Giant.”