Martin Marietta Materials, Inc.
) recently announced that it has completed the asset divestitures
as demanded by the U.S. Department of Justice (DOJ) for the
approval of the Texas Industries deal.
The leading supplier of aggregates and heavy building materials
completed the Texas Industries acquisition in early July for $2.7
billion, including debt. The acquisition was first announced in
The DOJ approved the deal on 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 to resolve
competition issues with respect to the acquisition. Martin Marietta
has sold the assets to another aggregates producer Vulcan Material
) for cash and real property.
The Texas Industries acquisition has strengthened Martin
Marietta's position in the aggregates market while increasing
presence of its concrete business in high-end markets like Texas.
It also exposed Martin Marietta to the growing cement markets in
Texas and California.
Martin Marietta expects the acquisition to contribute to
earnings per share in 2014 and increase cash flow in the first
fiscal year following the integration. The acquisition is expected
to generate $70 million of annual pre-tax synergies by fiscal 2017.
Also, in connection with the acquisition, Martin Marietta issued
$700 million of senior year notes.
Other Stocks to Consider
Martin Marietta Materials carries a Zacks Rank #3 (Hold). Other
stocks in the building sector worth considering include PGT, Inc. (
) and Winnebago Industries, Inc. (
). Both the companies have a Zacks Rank #2 (Buy).
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VULCAN MATLS CO (VMC): Free Stock Analysis
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