Cemex dispatches Rinker pipe and precast business in $500M Quikrete deal

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.