Construction material producer,
Vulcan Materials Company
), has agreed to sell some interests in the future productions of
the four quarries in Atlanta, Ga., to
Plum Creek Timber Company
) for $154 million. The quarries are capable of producing 255
million tons of crushed stone over approximately 25 years.
As per the deal, Vulcan will control the production at the
facility and Plum Creek will earn a percentage of the royalty.
Therefore, Vulcan will be able to save taxes while maintaining
full ownership and operational control on these quarries. The
deal also provides enough capital to the company to make
strategic investments in its aggregate business. Plum Creek and
Vulcan share the same long-term goals regarding the construction
aggregate sector. The deal is expected to be beneficial for both
as it will increase the efficiency of these quarries.
The housing market has steadily made a comeback from the
severe and widespread downturn. However, the housing momentum
seen in 2012 and in the first half of 2013 seems to have
moderated somewhat with the recent spike in mortgage rates, tight
credit availability and a limited supply of land and labor.
Homebuilders are speeding up land investments. Companies like
The Ryland Group Inc.
), Calif.-based homebuilder
D.R. Horton Inc
) heavily invested in land acquisition and site development in
the first half of 2013.
Vulcan's first-quarter adjusted net loss of 49 cents per
share, reported in August, was wider than both the Zacks
Consensus Estimate loss and the prior-year quarter's loss. Total
revenue was also quite sluggish due to lower aggregates volume.
Vulcan reaffirmed its 2013 aggregates volume growth guidance
despite first-quarter shortfall on expectations of growth in the
D R HORTON INC (DHI): Free Stock Analysis
KB FINL GRP-ADR (KB): Get Free Report
PLUM CREEK TMBR (PCL): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
VULCAN MATLS CO (VMC): Free Stock Analysis
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