CMC TO ACQUIRE FOLEY PRODUCTS COMPANY
Rhea-AI Summary
Commercial Metals Company (NYSE: CMC) agreed to acquire Foley Products Company for a cash purchase price of $1.84 billion on Oct. 16, 2025, subject to customary adjustments. The purchase equals 10.3x Foley's forecasted 2025 EBITDA (effective ~9.2x after cash tax benefits).
The deal creates an immediate precast platform scale (35 facilities across 14 states), positions CMC as the #3 U.S. precast player, and is expected to be accretive to EPS and free cash flow in year one. Annual run-rate synergies of $25–30 million are targeted by year three. Pro forma, core EBITDA margin is forecast to rise by 210 bps, ~32% of pro forma segment adjusted EBITDA will come from Emerging Businesses, and net debt/adjusted EBITDA is expected ~2.7x with a plan to reach within 18 months.
Positive
- Cash purchase price of $1.84 billion
- Transaction at 10.3x forecasted 2025 EBITDA (effective ~9.2x)
- Expected EPS and free cash flow accretion in year one
- Targeted $25–30M annual run-rate synergies by year three
- Pro forma +210 bps core EBITDA margin improvement
- Creates #3 U.S. precast platform with 35 facilities in 14 states
Negative
- Pro forma net debt/adjusted EBITDA forecasted at ~2.7x post-close
- Need to reduce leverage to within 18 months, requiring significant debt paydown
News Market Reaction – CMC
On the day this news was published, CMC declined 7.26%, reflecting a notable negative market reaction. Argus tracked a peak move of +2.8% during that session. Argus tracked a trough of -6.7% from its starting point during tracking. Our momentum scanner triggered 47 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $523M from the company's valuation, bringing the market cap to $6.68B at that time. Trading volume was elevated at 2.0x the daily average, suggesting increased selling activity.
Data tracked by StockTitan Argus on the day of publication.
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Provides immediate scale to CMC's precast platform, positioning CMC as the third largest player in the
U.S. and a leader across the Mid-Atlantic and Southeast regions - Adds best-in-class precast operator with industry-leading EBITDA margins and cash flow profile to CMC's portfolio
- Unlocks incremental upside from recently announced Concrete Pipe & Precast ("CP&P") acquisition with complementary footprint in high-growth markets and line of sight to meaningful synergy opportunities
- Transforms CMC's financial profile; expected to be accretive to earnings per share and free cash flow per share in the first year
- Drives strong free cash flow generation to provide clear path to deleveraging
"The acquisition of Foley presents a unique opportunity to create immediate scale for our precast platform while adding a best-in-class business with industry-leading margins to CMC's portfolio," said Peter Matt, President and Chief Executive Officer. "We believe precast has significant value creation potential for CMC, and the addition of Foley will help unlock further upside from our pending acquisition of CP&P. As a result, we will be even better positioned to bring value to our customers through an expansion of CMC's commercial portfolio into mission critical precast applications across a highly complementary footprint in the Mid-Atlantic and Southeast. Our new precast platform is also expected to transform CMC's financial profile, bringing sustainably higher and more stable margins and cash flow, along with significant synergy opportunities as we apply best practices across the network."
Compelling Strategic and Financial Rationale
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Provides immediate platform scale in a strategically attractive industry: Entry into the precast industry through the acquisitions of Foley and CP&P strengthens CMC's strategic position by broadening its commercial portfolio in a way that creates additional value for customers, enhancing CMC's exposure to powerful structural trends in construction, providing new capabilities to address construction industry challenges, and establishing a new growth platform with a significant future runway. With a
17% share of theU.S. concrete market that continues to grow, precast is a strong strategic fit for CMC, and its success will be supported by leveraging existing leadership positions in early-stage construction and deep knowledge of customers, market applications, and geographies. Following the proposed acquisitions of Foley and CP&P, CMC will operate 35 facilities across 14 states, creating the #3 precast platform inthe United States and a leader in the Mid-Atlantic and Southeast. -
Presents unique opportunity to acquire a best-in-class asset: Foley's EBITDA margin and free cash flow generation capabilities lead the industry and are enabled by long-established best practices across its operations, as well as an extensive offering of solutions and related services that customers highly value. Foley has demonstrated an ability to successfully apply this formula to its own past acquisitions, increasing EBITDA margins by an average of over 10 percentage points at acquired locations. Leveraging the best practices of both Foley and CP&P as we grow our precast platform will enable CMC to drive meaningful value creation.
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Creates meaningful synergy opportunities with CP&P: CMC has identified approximately
$25 million $30 million -
Enhances CMC's business with combined precast platform that will transform financial profile: The proposed acquisitions of Foley and CP&P, creating one of the largest precast businesses in the
U.S. , will add a complementary new earnings driver that substantially enhances CMC's financial profile, increasing our core EBITDA margin by 210 basis points on a pro forma basis, and driving meaningful improvement in our free cash flow. Following the completion of the transactions, approximately32% of CMC's total pro forma segment adjusted EBITDA will be generated by the Emerging Businesses Group and the precast platform, representing a significant increase from the15% contributed by the Emerging Businesses Group in FY 2025. These businesses, including precast, feature higher and less volatile margins and cash flow conversion than the CMC average, while being less capital intensive relative to steelmaking. - Generates strong free cash flow with clear path to deleveraging: The addition of Foley and CP&P to CMC will create a strong free cash flow generator. Following the completion of both acquisitions (Foley and CP&P), net debt to adjusted EBITDA is forecasted to be approximately 2.7x. CMC will prioritize debt repayment and utilize the expected enhanced cash flow provided by its precast platform to reduce net leverage to its target level of below 2.0x within 18 months.
About Foley Products Company
Foley is a leading supplier of precast concrete and pipe products to the Southeast region, with additional presence in the Central and
About Precast Concrete and Concrete Pipe Products
Precast concrete and concrete pipe products are construction components formed by pouring concrete into a reusable mold, then curing it in a controlled manufacturing environment. The component is then transported in its final form to a construction site for installation. This process produces durable, ready-to-use components of reliable quality that can be installed quickly, saving time, and requiring less labor than pour-in-place techniques. Precast concrete and concrete pipe serve mission-critical applications often for site infrastructure such as utility connections, water supply, or stormwater management. Precast solutions are used widely across each region of
Transaction Details
The transaction has been approved by the boards of directors of Commercial Metals Company and Foley Products Company. The closing of the transaction is expected to occur in a timely manner following customary regulatory review and is subject to customary closing conditions. The Company has obtained a commitment for financing to complete the transaction.
Advisors
Moelis & Company LLC served as the exclusive financial advisor and Akin Gump served as legal counsel to CMC for this transaction.
Conference Call
Commercial Metals Company (NYSE: CMC) will host a conference call to discuss this announcement, as well as the Company's fourth quarter financial results. CMC invites you to listen to its conference call that will be broadcast live over the internet today, October 16, 2025, at 11:00 a.m. Eastern Time (10:00 a.m. Central) with Peter Matt, President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer.
About CMC
CMC is an innovative solutions provider helping build a stronger, safer, and more sustainable world. Through an extensive manufacturing network principally located in
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, with respect to the proposed acquisitions of Foley and CP&P and the timing thereof and the expected benefits of the transactions, the ability to obtain regulatory approvals and meet other closing conditions for the proposed acquisitions, growth rates in certain reportable segments, product margins within our Emerging Business Group segment, capital expenditures, tax credits, our liquidity and our ability to satisfy future liquidity requirements, the anticipated benefits and timeline for execution our growth plan and initiatives, including our TAG operational and commercial excellence program, and our expectations or beliefs concerning future events. The statements in this news release that are not historical statements, are forward-looking statements. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans or intentions.
The Company's forward-looking statements are based on management's expectations and beliefs as of the time this news release was prepared. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in our filings with the Securities and Exchange Commission, including, but not limited to, in Part I, Item 1A, "Risk Factors" of our annual report on Form 10-K for the fiscal year ended August 31, 2024, and Part II, Item 1A, "Risk Factors" of our subsequent quarterly reports on Form 10-Q, as well as the following: changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry; rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of downstream contracts within our vertically integrated steel operations due to rising commodity pricing; excess capacity in our industry, particularly in
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SOURCE Commercial Metals Company