Cementos Argos announced it has entered into a definitive agreement with Summit Materials, Inc. under which the U.S. operations of Cementos Argos, Argos North America Corp, will combine with Summit in a cash and stock transaction valued at $3.2 billion.
Argos North America Corp brings to the combination its 4 integrated cement plants, 2 grinding stations, 140 ready-mix concrete plants, and a complementary distribution network of 8 maritime ports and 10 inland terminals. The combination would create:
• A company with combined proforma revenues over $4 billion and approximately $1 billion in EBITDA, including synergies.
• The 4th largest cement platform in the United States, with an approximate capacity of 11.6 million tons per annum.
• The 6th largest aggregates platform in the United States, with reserves of over 5.5 billion short tons and annual sales of around 70 million short tons.
• One of the largest concrete producers, with more than 220 plants and more than 1800 mixers.
As a result, the combined company will have presence in 30 states, with a strong positioning in high growth markets, with complete vertical integration from quarries to end customer in many of them. Having access to an extensive ports and terminal network will enable competitive imports of building materials to better serve customers by complementing domestic production. This combination unlocks estimated annual synergies of, at least, $100 million, with significant realization within 2 years, derived from optimized sourcing, enhanced operational efficiencies, increased utilization of the import terminals’ network, and an augmented asset base to increase the use of alternative fuels. Likewise, it leverages on a cement supply agreement from the Cartagena plant and enhances the ability to pursue attractive growth opportunities, both organic and inorganic, in current business lines and in others such as supplementary cementitious materials and new sources of aggregates.
