Eagle Materials is to purchase a Kosmos Cement plant in Kentucky which it says can produce nearly 1.7 million tonnes of cement annually.
Eagle expects the $665 million deal to increase its cement capacity by around 25% and be accretive to earnings and cash flow in the first full year of ownership.
Michael Haack, Eagle’s CEO, says: “The Kosmos facilities are high-quality, low-cost assets that align with our long-term strategic growth plans and meet our criteria for new investment. These assets will also enable us to participate more significantly in US construction and infrastructure market growth.”
Mike Nicolais, Eagle Materials board chairman, says: “It not only extends our reach in key US markets, but also enhances the near and long-term cash flow generation capabilities of our businesses. Also this acquisition is especially timely in light of our previously announced plans to separate our heavy materials and light materials businesses into two independent, publicly traded corporations.
The transaction is expected to close in the first quarter of calendar 2020, following the receipt of required regulatory approvals and other customary closing conditions.