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U.S. Concrete Cements $1.3 Billion Merger Deal with Vulcan Materials

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Shares of U.S. Concrete Inc. traded 29% higher after the company reported it entered into a definitive merger agreement to be acquired by Vulcan Materials for $74 per share in cash, equating to a total equity value of $1.294 billion.

Prior to the opening of U.S. markets today, ready-mixed concrete and aggregate products company U.S. Concrete Inc. (USCR:NASDAQ) announced that it entered into a definitive agreement to be acquired by Vulcan Materials Co. (VMC:NYSE), a major producer of aggregates-based construction materials, for $74.00 per share in cash, representing a total equity value of $1.294 billion.

The company advised that the agreement stipulates that Vulcan Materials will acquire 100% of the issued and outstanding shares of U.S. Concrete's common stock and that the merger has already been unanimously approved by each respective company's Board of Directors. The firm noted that the transaction is expected to close in H2/21, but remains subject to acceptance by U.S. Concrete's shareholders along ordinary closing conditions and regulatory approval.

U.S. Concrete stated that its operations, many of which are located within large metropolitan areas, will serve to greatly complement and be a "natural addition" to Vulcan's existing footprint. Specifically, the report advised that that U.S. Concrete "presently has 27 aggregates operations serving California, Texas and the Northeast, that shipped 12.6 million tons in 2020."

According to details outlined in the report, U.S. concrete's added business will provide Vulcan with access to blue-water source of high-quality aggregates reserves and enhance its position in high-growth regions throughout Texas as well as in the New York and New Jersey metro areas.

Vulcan Materials' Chairman and CEO Tom Hill commented, "U.S. Concrete is an important Vulcan customer in a number of key areas and this transaction is a logical and exciting step in our growth strategy as we further bolster our geographic footprint…This is a merger of two corporate cultures that value people, technology, operating disciplines, customer service and the entrepreneurial spirit and it positions Vulcan to further drive sustainable, long-term shareholder value."

U.S. Concrete's President and CEO Ronnie Pruitt remarked, "Today's announcement that we are combining with Vulcan, a leading producer of construction aggregates, marks a major milestone in U.S. Concrete's history...Our combined organization will share an extensive and successful track record of acquisitions and greenfield development, and we look forward to working with Tom and the entire Vulcan family to close this transaction and integrate our two strong businesses."

Vulcan Materials is based in Birmingham, Ala., and has a market cap of about $24 billion. The company is a large producer of construction aggregate primarily crushed stone, sand and gravel. In addition, the firm is a maker and supplier of aggregates-based construction materials such as asphalt and ready-mixed concrete.

U.S. Concrete is headquartered in Euless, Tex., and describes itself as "a leading supplier of aggregates and concrete for infrastructure, residential and commercial projects across the country." The firm noted that it has historically grown its business both organically and by strategically acquiring several independent producers. The report noted that U.S. Concrete has a strong market presence in many large high-growth metropolitan markets including the Dallas/Fort Worth, New York City, Philadelphia, San Francisco and Washington, D.C. areas.

U.S. Concrete started off the day with a market cap of around $970.1 million with approximately 16.98 million shares outstanding and a short interest of about 5.2%. USCR shares opened more than 28% higher today at $73.3345 (+$16.1945, +28.34%) over Friday's $57.14 closing price. The stock has traded today between $73.10 and $74.19 per share and is currently trading at $73.75 (+$16.61, +29.07%).


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