Sources: U.S. Concrete Inc., Euless, Texas; Vulcan Materials Co., Birmingham, Ala.; CP staff
U.S. Concrete has secured a premium aggregates source to integrate with its 12-plant Central Concrete Supply Co. ready mixed business in northern California. The producer bested a Vulcan Materials offer for Vancouver, B.C.-based Polaris Materials Corp., which distributes sand & gravel from a major Vancouver Island deposit through five San Francisco Bay Area and Los Angeles market sites.
“We believe Polaris is an ideal strategic fit and enables a replication in California of our vertically integrated business model in New York,” says U.S. Concrete CEO William Sandbrook. “The acquisition will provide long-term, high-quality aggregate reserves and is expected to deliver meaningful synergies and strengthen the company’s strategic position in highly attractive, aggregate supply-constrained Californian markets.”
After closing, he adds, “U.S. Concrete expects to have the capability to self-supply a large majority of its market-leading ready-mixed concrete operations’ aggregate requirements in northern California and to drive increased production volumes at Polaris’ Orca Quarry. The acquisition also provides us an entrance into southern California through the Polaris-operated Long Beach Terminal.”
U.S. Concrete offered $2.72/share in a deal valuing Polaris at $247 million—a 22 percent premium to the $2.23/share offer Vulcan Materials announced in late August. An agreement for the latter included a provision for the Polaris board to consider a “superior proposal” from other prospective suitors.
“Vulcan is a disciplined buyer, and we believe that our prior agreement to acquire Polaris represented full and fair value for the company,” noted Chairman and CEO Tom Hill in a press release indicating Polaris’ change of heart on the agreement and payment of an $8 million termination fee.
U.S. Concrete’s offer is subject to Polaris shareholder approval. The Polaris board and a special committee of independent directors have unanimously recommended that shareholders, option holders and deferred unit holders vote in favor of the U.S. Concrete offer.