P&Q Profile: Colas USA’s Cody Ladd

By |  November 22, 2022
Photo: Cody Ladd


Cody Ladd, whose career in the aggregate industry stretches back to 2008, joined Colas USA earlier this year following stints with Arcosa, Carmeuse, Martin Marietta, and other top-producing companies. P&Q caught up with Ladd to discuss trends in mergers and acquisitions, which is now a specialty for the 36-year-old whose father and brother also work in the industry.

Construction materials M&A really took off in 2021 after the COVID pause we saw in 2020. How would you describe the sort of industry M&A activity that’s taking place here in 2022?

2022 has been slower than we anticipated, but that’s not to say Colas USA has slowed down with our M&A efforts. We continue to explore opportunities that fit within our overall growth strategy.

2021 certainly had a backlog from the COVID pause. 2021 also saw the passing of the IIJA (Infrastructure Investment & Jobs Act), which is a robust increase in federal infrastructure funding. Plus, we have significant infrastructure demand in the U.S. I believe IIJA gave business owners in construction materials more confidence to keep their business, as well as some optimism that slowed M&A activity in 2022.

How would you say Colas USA fits into overall activity as it pertains to the 2022 M&A landscape?

Colas USA continues to explore numerous M&A opportunities that will strengthen our overall operations and growth strategy. Our CEO, John Harrington, is motivated to expand our asphalt and aggregates to be core functions of our business and not just support functions for our paving business.

We have an excellent team working on M&A opportunities for the balance of 2022. We are excited that our hard work and dedication in this area will allow us to be successful in continuing our growth and expansion strategy within the United States.

How is the economy currently shaping the construction materials M&A environment?

Upstream assets like aggregates safeguard quite a bit from the adverse impacts of the economic cycle. The demand for construction materials, especially in infrastructure, isn’t going away; it just pauses or slows down during economic cycles.

Rising interest rates will continue to impact the number of active acquirers in the market. It may also slow down PE (private equity) funds, but only in the short term.

What M&A goals does Colas USA have for the remainder of 2022? How about for 2023 and beyond?

Historically, we’ve been very disciplined in our approach, which has served our group well.

Colas USA operates in a decentralized fashion. Throughout our seven regional subsidiaries, we nurture the brand and culture that makes each of our companies unique and thrive in the areas where they operate. As part of the Colas USA family, they all benefit from the strength of our national and international networks while maintaining their local identity. With that said, part of our goal with M&A is to grow in the markets that we are currently in, as well as find attractive new markets to enter while maintaining our decentralized nature with every acquisition that takes place.

We distinguish ourselves from other acquirers because we encourage keeping the brand and what made the company successful in the first place. Our goal is not to assimilate acquisitions into our business. It’s to partner with owners and cultivate new growth together. I believe that to be a substantial advantage in a competitive M&A market.

We’re looking to build bench strength through acquisitions to support our growth plans. We want to acquire human capital as much as we want to acquire market share. As we all know, having quality employees who are motivated and passionate about their work and our industry allows a company to be successful and sustainable in the long run.

To us, acquisitions are not just about increasing our geographical footprint. It’s about developing and strengthening relationships with our business partners and customers.

When it comes to growth, it seems like the industry’s bigger producers utilize M&A as a means to achieve it, as starting a greenfield is increasingly challenging. Is there a preferred route at this stage?

Acquisitions are always going to be the preferred route because they are quick, and the payback begins immediately relative to greenfields. Colas looks at greenfields as complimentary when we identify a target market for growth. That’s not to say greenfields aren’t going to happen. The Southeast is a great example. We’ve seen significant greenfield activity there recently because that area is high-growth and consolidated.

How competitive is the M&A space becoming as the construction materials market consolidates further?

Scarcity is always a factor. Opportunities in strong markets are minimal. When they are available, they go for high prices/multiples. Those are the markets where we’re seeing greenfields happening the most.

Are there any other M&A trends or developments you’re seeing?

The Southeast is going to be an excellent case study for vertical integration. The top aggregate producers do not appear to be going downstream in these markets and have given no indication that they plan to. I’m curious to see if that continues to be their strategy as their competition continues to vertically integrate.

Featured photo: P&Q Staff

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