Vulcan Materials Company
) has acquired a quarry in Oklahoma with rail connectivity to Texas
and a couple of distribution yards in Dallas from Martin Marietta
Materials, Inc. (
). The deal is expected to strengthen Vulcan's position in one of
its major aggregate markets, Texas.
Vulcan Materials is the largest producer of construction aggregates
in the U.S. Aggregates like crushed stone, sand and gravel are used
in all kinds of construction projects, whether public or private.
Vulcan has been reporting over 15% increase in aggregate volume in
the Texas market for the past few quarters. The acquisition of the
resources in Texas will further strengthen the company's business
in this lucrative market.
Aggregates volumes and pricing rose year over year in the recently
reported second quarter 2014, resulting in high double digit
increase in segment revenue. Aggregate segment benefited from
higher demand for Vulcan products as the construction activity
On the other hand, Martin Marietta had to sell these assets in
accordance to a settlement with the U.S. Department of Justice
(DOJ) in relation to its acquisition of Texas Industries. Martin
Marietta completed the Texas Industries acquisition in early July
for $2.7 billion, including debt. 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
Vulcan Materials carries a Zacks Rank #3 (Hold).
Investors interested in the building construction/building products
sector can consider better-ranked stocks like PGT, Inc. (
) and Boise Cascade Co. (
). Both the companies hold a Zacks Rank #2 (Buy).
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VULCAN MATLS CO (VMC): Free Stock Analysis
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