Minnesota producer envisions growth by M&A

Kraemer Mining & Materials updated all of the processing equipment at the Burnsville Quarry in 2017. Photo: P&Q Staff

Cody Ladd can’t remember a day when aggregates weren’t central to his everyday life.

Ladd’s father, Ed Ladd, has worked in the industry for about 40 years, carving out a career for himself in operations. Ladd’s brother, Jeff Weeks, also chose aggregates as a pathway, and he’s been running plants for about 20 years.

Now 37, Cody is very much an aggregates guy like his father and brother. Cody’s work, however, is more on the business side of the industry.

“I’m lucky I have a phone-a-friend in my dad,” says Cody, who joined Kraemer Mining & Materials in Minnesota as COO in March of this year. “Typically, I can take a picture of a problem in the plant, send it to him and ask: ‘What do you think?’”

As Cody describes, Ed and Jeff were excited when he shared photos of Kraemer’s revamped 2 million-tpy operation in Burnsville, Minnesota.

“They were immediately asking: ‘When can we come up,’” Cody says. “My brother is a military guy, he’s very stoic and reserved. I sent him a picture from the lookout over the plant, and he sent me this excited and massive text full of questions that said: ‘Love the TeleStackers. Are those two surge piles? I don’t see any haul trucks.’

“He got a little bit jealous,” Cody adds, “but in a good way.”

New approach to growth

Kraemer updated all of the processing equipment at the Burnsville Quarry in 2017. In doing so, Cody says co-owners Tom Kraemer and Scott Peterson did not spare any expense.

“They didn’t take that in steps,” he says. “That’s what was done exceptionally well.”

With a sophisticated operation in place in Burnsville, Kraemer’s owners turned their attention earlier this year to expanding the business. That’s why Cody, with a background in mergers and acquisitions, came on board.

“They want someone to really grow the business through acquisitions and attempt to replicate what we have here as much as possible,” Cody says. “The cool thing about that is that’s as specific as they really got. The rest of it really was up to whoever’s in the seat.”

Ladd

That seat is now Cody’s. And the opportunity to build Kraemer through M&A – taking the company to places it hasn’t been in its 64-year history – was attractive to Cody.

“M&A is a landscape I understand really well,” says Cody, whose career includes stints at Arcosa, Carmeuse, Colas USA and Martin Marietta. “That was a lot of what they were looking for in recruiting me. They were looking for a commercial and M&A person more than anything else.”

Of course, the Minneapolis-St. Paul market where Kraemer operates has no shortage of competitors. Although Martin Marietta and Holcim compete there, Cody is not deterred about the prospect of expanding through M&A.

“If you’re looking at smaller, private acquisitions, I think we can be as competitive as anyone else,” Cody says.

Kraemer doesn’t have to limit itself to Minnesota, he adds. Other producers have proven in recent years that growth can be achieved in new states or regions.

“Look at the origins of Luck Stone,” Cody says. “They were in some really phenomenal markets in Virginia where they built a world-class reputation. They had no problems going out, greenfielding and building more sites because of how well they were thought of in that state.”

Luck Stone stayed within Virginia’s confines for most of its history. But the company ventured outside the state and is a model to follow, according to Cody.

“They jumped into the Southeast with the Stephens [Industries] acquisition,” Cody says. “That’s gone really well for them. They’re now greenfielding in the Southeast. For me, the way they’ve grown for a privately held company is the standard. For us, that’s the goal. That’s the way you want to grow as a privately held aggregates company.”

Still, one thing Cody has learned about M&A is to keep an open mind.

“I think it’s a best practice to be really broad in an M&A plan,” he says. “You often hear: ‘We’re looking at targets that make sense and align well.’ When you read that, it doesn’t really say anything specific. But that’s not a bad thing. The strategy is intentionally broad to keep possibilities open.”

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