Eagle Materials buys 2 cement plants in $446M deal
DALLAS (AP) — Construction materials supplier Eagle Materials Inc. is buying two cement plants and their affiliated operations from Lafarge North America for $446 million.
The deal announced Wednesday will increase Eagle Materials' cement production capacity by 1.6 million tons, or roughly 60 percent. The plants are in Sugar Creek, Mo. and Tulsa, Okla.
Eagle Materials also will get six distribution terminals, eight ready-mix concrete plants and a fly-ash business.
The combined operations generated about $178 million in revenue during the year ending in June. Eagle Materials' revenue totaled $529 million during the same 12-month stretch.
"These two high-quality Lafarge cement plants are a compelling fit with our objectives," Eagle Materials CEO Steven Rowley said in a statement. The company, which is based in Dallas, currently owns four cement plants.
Eagle Materials expects to complete the acquisition of the Lafarge plants in November or December. The company intends to finance the purchase with bank loans and the sale of 3 million shares of stock. The price of the secondary offering announced Wednesday hasn't been set. If the offering is pegged to Eagle Materials' closing stock price of $43.30, the offering would raise about $130 million. Eagle Materials could sell an additional 450,000 shares, based on investor demand.
After the acquisition is closed, Eagle Materials will supply Lafarge with cement for four to five years. A Lafarge affiliate, meanwhile, will supply low-cost alternative fuels to the acquired plants.
Lafarge's parent company, Lafarge SA, is based in Paris.