This year began with a shareholder vote realigning the portfolio and ownership of Denver-based Summit Materials Inc. around Argos North America Corp. cement and ready mixed production assets and top shareholder Cementos Argos S.A. It closes with prospects for a similar action transforming New York Stock Exchange-traded Summit Materials to a subsidiary of privately held Quikrete Holdings Inc., Atlanta. The latter confirmed its boldest move to date late last month in a $52.50/share takeover offer for the cement, aggregate and concrete producer. Summit Materials directors unanimously approved the terms and recommended shareholders follow suit in voting scheduled by mid-2025.
The deal equates to more than $9 billion in cash and assumption of $2 billion-plus of debt. Deal financing certainty amplifies creditor confidence Quikrete Holdings has earned through decades of meeting inventory and logistics demands involving retail and trade outlets no less than Home Depot and White Cap. The company’s pursuit of concrete business opportunities outside its heritage packaged dry mix franchise began with the acquisition of Pavestone, whose 1990s growth paced the emergence of hardscape units in big box store settings.
The Summit Materials offer is more than double the dollar value of post-Pavestone transactions. They have loaded the Quikrete portfolio with Contech Engineered Solutions, including namesake precast, prestressed concrete structures and Keystone Retaining Wall Systems brands; Argos USA, Boral Brick and Midwest Block concrete masonry plants; plus, the coast-to-coast Rinker Materials and Forterra Inc. concrete pipe, structural and architectural precast operations. Based on Summit Materials figures and Concrete Products files, we estimate that nearly a decade of acquisitions will afford Quikrete Holdings these U.S. construction material or product market positions on top of its packaged mix leadership:
- #4 in finished cementitious materials
- #6 in total crushed stone, sand & gravel shipments
- #1 in concrete pipe, underground and utility precast
- #2 in concrete masonry and hardscape units
- Top 10 in ready mixed concrete and precast, prestressed
They abut Oldcastle APG, Oldcastle Infrastructure and CRH Americas Materials Solutions positions in packaged materials, concrete masonry building and hardscape units, drainage and utility structures, plus cementitious materials.
Quikrete Holdings and CRH/Oldcastle have built powerhouse portfolios through astute assimilation of solid acquisition targets and management pedigree. In Summit Materials, Quikrete Holdings gains a business Oldcastle Materials veteran Tom Hill founded in 2009. Over nearly three decades, he had a prominent role in parent company CRH Plc’s acquisition and greenfield development successes this side of the Atlantic, cultivating a dominant player in crushed stone, sand & gravel and manufactured concrete, then ready mixed and, finally, cement and cementitious materials. The Summit Materials addition would follow Quikrete Holdings’ 2022 buyout of NYSE-traded Forterra Inc., strongly complementing the Rinker Materials pipe and precast business acquired from Cemex USA in 2017. Forterra’s fortunes turned sharply with the 2019 arrival of CEO Karl Watson Jr., whose resume included brief Summit Materials and lengthy Cemex USA and Rinker Materials executive tours.
A major cement position has proved the next logical step in the Quikrete Holdings and CRH Americas/Oldcastle trajectories. In 2018, CRH acquired Ash Grove Cement Corp., a mega bolt-on transaction for American Cement and CRH Canada operations in Florida and Ontario. With financial and vertical integration leverage nearly unmatched among North American peers, Quikrete Holdings now aims to secure a supply chain reinforcement in the Ash Grove league.
Our Strategist columnist Pierre Villere, one of the top minds in concrete producer mergers & acquisitions, sees the Summit Materials transaction “catapulting Quikrete into the ranks of the largest privately held enterprises in our industry, if not the largest. The senior management team at Quikrete continues to execute brilliantly on their growth strategy.”
And how!