New Enterprise Stone & Lime (NESL) has acquired certain assets of Popple Construction and Pioneer Aggregates (Laflin) which comprises one aggregate plant, one hot mix asphalt plant and a paving laydown business. These facilities, located between Clifford and Allentown, are intended to allow NESL to expand its operating footprint and scope into the Wilkes-Barre /Scranton, Pennsylvania market.
Laflin was purchased for approximately $22.3m and was funded using existing cash and NESL’s senior secured credit facilities. The company plans to utilise its shared service centre and the scalability of its infrastructure to integrate the plants.
Additonally, NESL and its subsidiary Work Area Protection and Associated Affiliates (WAPCO) entered into an asset purchase agreement with Hill & Smith Holdings to sell the remaining part of the company’s traffic services and equipment business, allowing NESL to exit the business segment. The cash purchase price for the WAPCO assets was $42m. NESL used the net proceeds of the sale to repay the Senior Secured Credit Facility amounts borrowed to fund the Laflin acquisition and further reduce existing debt.
Paul Detwiler, NESL’s president and chief executive officer, says: “The two transactions represent a key step in our strategic alignment as a construction materials Company focusing on aggregate sales. We believe the Laflin Acquisition, after a full year of cost savings and synergies, will generate a similar adjusted EBITDA as the WAPCO Assets, allowing us to further de-leverage and de risk NESL.”
