Irish building materials firm CRH is to buy US cement maker Ash Grove Cement Co for $3.5bn.
The proposed transaction will be financed through existing financial resources, CRH said in a statement.
Ash Grove Cement Company said in a statement that the transaction has been unanimously approved by its directors and the deal is expected to close in late 2017 or early 2018, subject to stockholder approval, regulatory approval and other customary conditions.
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CRH's Stoneco of Michigan, Ottawa Lake Quarry[/caption]
Charlie Sunderland, chairman Ash Grove Cement, said: “CRH, as our largest customer, has enjoyed a close and highly productive relationship with Ash Grove for many decades. The board of directors believes that CRH will be able to take Ash Grove to its next phase of development after 135 years in operation and over a century under the stewardship of the Sunderland family.”
Under the terms of the merger agreement, Ash Grove stockholders will be entitled to receive cash merger consideration comprised of a pro rata share (based on the number of shares of stock outstanding) of the $3.5 billion enterprise value, minus adjustments for certain non-controlling interests and debt-like items and certain other liabilities, and further adjusted to the extent net working capital and cash on hand at closing vary from certain thresholds.
It is expected that approximately 98% of the merger consideration will be paid at the time of closing based on estimated information, and an additional amount, if any, will be paid following completion of a post-closing adjustment process intended to "true-up" the closing estimates to actual amounts as of the closing date. While the final amount of the merger consideration will not be determined until following closing of the transaction due to fluctuation of certain components thereof through closing, the company currently estimates that the final amount of merger consideration will be in the range of approximately $449 - $454 per share based on Ash Grove’s balance sheet as of June 30, 2017.
In addition, prior to closing of the transaction, the company intends to pay dividends of excess cash currently anticipated to be in the range of approximately $617 - $706 million in the aggregate, or approximately $82 - $94 per share of outstanding Common Stock and Class B Common Stock, and $86 - $99 per share of outstanding Class D Common Stock.
In 2016, Ash Grove shipped 8.2 million tons of cement from eight cement plants in the Midwest, Texas and Western United States. In addition to cement manufacturing, the company operates 52 ready-mixed concrete plants, 25 sand and gravel plants, 20 limestone quarries and nine packaged products plants.
