US Concrete has acquired Coram Materials for a purchase price of $142 million while also announcing its full year and fourth quarter 2019 results.
William J. Sandbrook, chairman of US Concrete, says the acquisition expands the company’s East Coast aggregates portfolio.
“The acquisition should produce a margin profile in excess of the Company's average within the first full year of ownership. Post synergies, which we expect to achieve within two years, the deal represents a multiple of approximately 7 times EBITDA. This acquisition possesses significant, premium sand reserves that will provide us with self-sufficiency in meeting our sand supply needs to our ready-mixed concrete operations in New York City as well as providing external sales to third party customers. Coram's 50 million tons of reserves, located in the quickly depleting Long Island sand market, increases the vertical integration of our New York operations, strengthens our competitive position and advances the continuation of our strategy of expanding into higher margin aggregates businesses. Following our successful Polaris acquisition, we continue to seek out accretive opportunities of coupling the pull through capabilities of our large regional footprints of ready-mixed concrete operations with attractive aggregate assets,” he adds.
Sandbrook also confirmed the company will continue focusing on its operational, technology and financial improvement initiatives.
“Through re-engineering certain of our processes and technology investments, we expect to generate enhanced margins. Our record high adjusted EBITDA in the second half of 2019 highlights the traction that our profit improvement initiatives are gaining within our operations,” he continues. “While our fourth quarter of 2019 results were negatively impacted by a significant increase in our self-insurance reserves, claim costs and premiums year-over-year, we experienced good growth in our aggregate products segment and are seeing positive momentum in ready-mixed concrete pricing to further enhance profitability."
FINANCIAL RESULTS
FULL YEAR 2019 COMPARED TO FULL YEAR 20181
- Consolidated revenue was $1,479 million versus $1,506 million
- Aggregate products revenue increased 6.9% to $195 million
- Aggregate products volume increased 2.5% to 11.4 million tons
- Aggregate products adjusted EBITDA increased 29.3% to $53.8 million
- Net cash provided by operating activities increased $16.0 million to $138.8 million
- Adjusted Free Cash Flow2increased $1.6 million to $105.0 million
FOURTH QUARTER 2019 COMPARED TO FOURTH QUARTER 20181
- Consolidated revenue decreased 0.2% to $369.2 million
- Aggregate products revenue increased 7.5% to $49.9 million
- Aggregate products volume increased 7.1% to 2.9 million tons
- Aggregate products adjusted EBITDA increased 19.2% to $14.9 million
- Net income increased $1.3 million to $4.4 million
- Net cash provided by operating activities increased $14.1 million to $46.7 million
- Adjusted Free Cash Flow2increased $6.7 million to $34.2 million
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