Acquisition expands U.S. Concrete’s East Coast presence

Sandbrook

U.S. Concrete shared details of a recent acquisition – Coram Materials Corp. – upon releasing its full-year and fourth-quarter 2019 performance results.

“We are excited to announce the completion of our most recent aggregates acquisition, Coram Materials Corp., for a purchase price of $142 million, which significantly expands our East Coast aggregates portfolio,” says Bill Sandbrook, chairman and CEO of U.S. Concrete. “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 seven times EBITDA (earnings before interest, tax, depreciation and amortization).

“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,” Sandbrook adds.

Coram’s 50 million tons of reserves are located in the Long Island sand market, increasing the vertical integration of U.S. Concrete’s New York operations.

“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,” Sandbrook says.

According to Sandbrook, U.S. Concrete continues to focus on previously discussed operational, technology and financial improvement initiatives. Through re-engineering certain processes and technology investments, the company expects 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,” Sandbrook says. “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.”