Martin Marietta Materials, Inc.
) finally completed its acquisition of Texas Industries, Inc., thus
securing the leading position in the aggregates and heavy building
materials market. Martin Marietta's share price has soared 24.7%
since Jan 28, when the acquisition was first announced.
On Jun 30, about 98% of Martin Marietta and 99% of Texas Industries
shareholders voted for the acquisition deal. The acquisition closed
immediately thereafter. Texas shareholders were entitled to receive
0.7 Martin Marietta shares against every Texas share they owned.
Texas Industries will now be a wholly-owned subsidiary of Martin
Marietta and will no longer be listed on the New York Stock
Headquartered in Raleigh, NC, the combined company will be headed
by Ward Nye, Martin Marietta's Chairman, President and Chief
Executive Office and the Martin Marietta executive team. Post
acquisition, Martin Marietta Materials has a market capitalization
of $8.8 billion as of Jul 1, 2014.
Martin Marietta Materials expects the integration of the acquired
business to be completed and full operations to commence by the end
of 2014. The acquisition is expected to generate $70 million of
annual pre-tax synergies by fiscal 2017. The acquisition will
create more than $500 million of returns for shareholders. The
company expects the acquisition to contribute to earnings per share
in 2014 and increase cash flow in the first fiscal year following
Late last month the U.S. Department of Justice (DOJ) approved the
deal on the condition that Martin Marietta would divest its
North Troy aggregate quarry in Mill Creek, OK and its two rail
yards sites in Dallas and Frisco, TX,
Texas Industries will strengthen Martin Marietta's aggregate
reserves and access to high end markets such as Texas. The merger
will also result in vertical integration across aggregates and
targeted cement, which will increase productivity and scale of
production. The combined company will benefit from an increase in
geographic diversity and combined access to a larger market.
Martin Marietta Materials carries a Zacks Rank #4 (Sell).
Investors interested in the building construction/building products
sector can consider stocks like
DR Horton Inc.
TRI Pointe Homes, Inc.
). All the three companies hold a Zacks Rank #2 (Buy).
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