Vulcan Materials Company
) recently announced the sale of its non performing cement and
concrete businesses in Florida to Cementos Argos for $720
million. The transaction is expected to close in the first
quarter of 2014. Cementos Argos is one of the largest cement and
concrete manufacturers and suppliers in the United States
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Vulcan Materials is engaged in the production, distribution and
sale of construction aggregates and other construction materials
and related services in the U.S. and Mexico. Vulcan is the
largest producer of construction aggregates in the U.S.
Aggregates like crushed stone, sand and gravel are used in all
types of construction projects, whether public or private.
Located in Florida and south Georgia, these assets include
Vulcan's Newberry, Florida cement plant, Tampa and Port Manatee
cement terminals and grinding facilities, 69 ready-mixed concrete
sites and 13 concrete block and building material sites. Post the
divesture of the businesses in Florida, Vulcan will continue its
aggregate operations in the state and will retain its cement
segment's ground calcium operations. Vulcan will supply
aggregates to these divested concrete facilities at market prices
for the next 20 years.
The recent divestures of non-core assets will strengthen the
company's financial position and help the company reduce debt and
focus its resources on its aggregates segments. Once the
divestiture is completed, it will generate a pre-tax gain of $210
Aggregates must ideally be produced near the area of use to save
on transport costs. The company's other production facilities and
aggregates reserves are situated at close proximity to large
metropolitan cities, thus giving it a competitive advantage to
invest in high-return projects.
Vulcan Materials carries a Zacks Rank #3 (Hold). Other
better-ranked industrial goods companies are
Beazer Homes USA Inc.
MDC Holdings Inc.
Toll Brothers Inc.
). All the three companies carry a Zacks Rank #2 (Buy).