Arcosa acquires Cherry Industries

Arcosa, a manufacturer of infrastructure-related products and services, acquired Cherry Industries for $298 million.

Established in 1952, Cherry Industries is a producer of natural and recycled aggregate serving the Houston market. Cherry serves a range of infrastructure markets, including commercial, highway, industrial and residential – while also providing concrete demolition services.

Cherry’s 12 Houston locations are added to Arcosa’s 19 aggregate and materials locations in Texas, extending Arcosa’s footprint in the Houston market and the state as a whole.

According to Arcosa, Cherry had revenues of about $176 million and earnings before interest, tax, depreciation and amortization of about $37 million for the 12-month period ending Sept. 30.

“We are very excited about this acquisition,” says Antonio Carrillo, president and CEO of Arcosa. “The transaction is aligned with our strategic plan, accelerating the growth of our high-value construction products segment and enhancing our geographic position within Texas. Cherry’s unique platform will provide additional organic and acquisition growth opportunities in Houston and adjacent markets in Texas and the Gulf Coast. Cherry’s unique business model of offering aggregates in combination with recycled aggregates represents an opportunity for Arcosa to replicate in other regions.”

Arcosa expects to fund the $298 million purchase with a combination of cash on-hand and borrowings available under its credit facility, according to the company. The transaction, approved by Arcosa’s board of directors, is expected to be accretive to earnings in 2020.

“We are pleased to join Arcosa, which represents an excellent cultural and strategic fit for our employees and our business,” says Leonard Cherry, president of Cherry Industries. “We look forward to working with the construction products team to grow our natural and recycled aggregates business in Houston and in new markets.”