Economy & Market
Eagle Materials to acquire CEMEX Fairborn cement plant
Eagle Materials Inc has announced that the company has entered into a definitive agreement with a subsidiary of CEMEX SAB de CV, to purchase CEMEX's Fairborn, Ohio, cement plant, as well as related assets, which include a distribution terminal in Columbus, Ohio, and a cement bagging operation. The cement plant has the capacity to grind nearly one million tons of clinker annually.
The purchase price is $400 million, subject to customary post-closing adjustments. Eagle anticipates certain tax benefits arising from the transaction, the net present value of which is expected to be approximately $50 million. The transaction is expected to close in the fourth quarter of calendar 2016, or shortly thereafter, following the receipt of required regulatory approvals. Calendar 2016 revenue and EBITDA for the acquired assets is estimated to be $79 million and $33 million, respectively. The acquisition will increase Eagle's US cement capacity by roughly 20 per cent and is expected to be accretive to earnings immediately post-closing.
Dave Powers, Eagle Materials Inc President and Chief Executive Officer, said the agreement represents a "significant step" in the company's growth strategy. "Our strategy has been to grow the cement side of our business. The Fairborn plant extends our US cement system and connects but does not overlap with the market reach of our existing plants. This high-quality cement plant is a compelling fit with our strategic objectives and our criteria for new investment. These assets will allow us to participate more fully in the US construction industry and further positions the company in target US heartland growth markets."