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Martin Marietta Announces Acquisition of Aggregates Operations From Affiliates of Blue Water Industries LLC; Company Also Completes South Texas Cement and Concrete Divestiture

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Martin Marietta Materials, Inc. (MLM) announces acquisition of 20 aggregates operations for $2.05 billion and divestiture of South Texas operations for $2.1 billion. The transactions aim to enhance product mix, margin profile, and durability, supporting future growth. The acquisitions are in line with the SOAR 2025 strategy, expanding into new markets like Nashville and Miami, with expected annualized EBITDA of over $180 million.
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The acquisition of 20 active aggregates operations by Martin Marietta Materials, Inc. from Blue Water Industries LLC represents a strategic expansion in the aggregates sector. This move is indicative of Martin Marietta's commitment to its SOAR 2025 strategy, focusing on aggregates-led product development. The choice of markets, including Nashville and Miami, points towards targeting high-growth areas, likely to stimulate demand for construction materials. The transaction's financing through balance sheet cash suggests a strong liquidity position, which is favorable for maintaining financial stability post-acquisition.

From a market perspective, this acquisition could enhance Martin Marietta's competitive edge in the Southeast region, potentially leading to increased market share and revenue growth. Investors should monitor the annualized EBITDA projection of more than $180 million, which could signal improved profitability and operational efficiency. The divesture of the South Texas operations aligns with portfolio optimization, indicating a focus on core, higher-margin businesses.

The financial implications of Martin Marietta's recent transactions involve a significant cash outflow of $2.05 billion for the acquisition, closely following a $2.1 billion cash inflow from the divesture of its South Texas cement and concrete operations. This near-symmetric cash flow management reflects a strategic reallocation of resources towards more profitable or promising segments. The acquisition's expected contribution to EBITDA is a critical metric for investors, as it could translate into enhanced shareholder value.

Long-term benefits may include improved economies of scale and cost efficiencies, but the short-term financial impact will depend on the seamless integration of the new operations. Regulatory approvals are a potential risk factor that could delay or alter the expected financial outcomes. The forthcoming earnings call may provide further clarity on the company's financial health and strategic direction, which could influence investor sentiment and stock performance.

The acquisition of aggregates operations by Martin Marietta is a significant event in the construction materials industry, as aggregates are a fundamental component in construction projects. The company's expansion into new geographic markets with proven, high-quality reserves is a strategic move that capitalizes on the growing construction demand in these regions. The emphasis on aggregates-led strategy highlights a focus on a core construction material with a stable demand curve, which can provide resilience through economic cycles.

Understanding the quality and quantity of the acquired reserves is important, as it directly affects the production capacity and the longevity of the operations. The mention of 'approximately 1 billion tons of proven reserves' indicates a substantial increase in Martin Marietta's resource base, which could lead to long-term supply security for the company and its customers. The impact on the broader construction industry could include more competitive pricing and availability of materials, potentially benefiting large-scale infrastructure and building projects.

RALEIGH, N.C., Feb. 12, 2024 (GLOBE NEWSWIRE) -- Martin Marietta Materials, Inc. (NYSE: MLM) (Martin Marietta or the Company) today announced that on February 11, 2024, it entered into a definitive agreement to acquire 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC (BWI Southeast) for $2.05 billion in cash. Additionally, on February 9, 2024, the Company completed its previously announced divesture of its South Texas cement and related concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.1 billion in cash.

Together, these portfolio optimizing transactions not only improve the Company’s product mix, margin profile and durability through cycles, but also provide balance sheet flexibility for future acquisitive and organic growth.

Ward Nye, Chairman, President and CEO of Martin Marietta stated, “These transactions are wholly consistent with the Company’s SOAR (Strategic Operating Analysis and Review) 2025 aggregates-led product strategy. Importantly, the BWI Southeast acquisition complements Martin Marietta’s existing geographic footprint in the dynamic southeast region by allowing us to expand into new growth platforms in SOAR-specific target markets including Nashville and Miami.

“Combined with the recent acquisition of Albert Frei & Sons, Inc. in Colorado, these two pure-play aggregates transactions provide approximately 1 billion tons of proven, high-quality reserves and are expected to generate more than $180 million of annualized EBITDA.”

The BWI Southeast transaction will be financed with balance sheet cash and is expected to close later this year, subject to regulatory approvals and other customary closing conditions.

Further details on these transactions as well as Martin Marietta’s full year results and overall 2024 outlook will be provided on the Company’s fourth-quarter and full-year 2023 earnings call on Wednesday, February 14, 2024 at 10:00 a.m. Eastern Time.

About Martin Marietta

Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 28 states, Canada and The Bahamas, dedicated Martin Marietta teams supply the resources for building the solid foundations on which our communities thrive. Martin Marietta’s Magnesia Specialties business produces high-purity magnesia and dolomitic lime products used worldwide in environmental, industrial, agricultural and specialty applications. For more information, visit www.martinmarietta.com or www.magnesiaspecialties.com.

Investor Contact:
Jacklyn Rooker
Director, Investor Relations
(919) 510-4736
Jacklyn.Rooker@martinmarietta.com
MLM-G

This release contains statements which constitute forward-looking statements within the meaning of federal securities law. Statements and assumptions on future revenues, income and cash flows, performance, economic trends, the outcome of litigation, regulatory compliance and environmental remediation cost estimates are examples of forward-looking statements. Numerous factors could affect the Company’s forward-looking statements and actual performance.

Investors are cautioned that all forward-looking statements involve risks and uncertainties and are based on assumptions that the Company believes in good faith are reasonable at the time the statements are made, but which may be materially different from actual results. Investors can identify these statements by the fact that they do not relate only to historic or current facts. The words “may”, “will”, “could”, “should”, “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “intend”, “outlook”, “plan”, “project”, “scheduled” and other words of similar meaning in connection with future events or future operating or financial performance are intended to identify forward-looking statements. Any or all of Martin Marietta’s forward-looking statements in this release and in other publications may turn out to be wrong.

You should consider these forward-looking statements in light of risk factors discussed in Martin Marietta’s Annual Report on Form 10-K for the year ended December 31, 2022, Martin Marietta’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, and other periodic filings made with the SEC. All of the Company’s forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to the Company or that it considers immaterial could affect the accuracy of its forward-looking statements, or adversely affect or be material to the Company. Except as required by law, the Company undertakes no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.

 


Martin Marietta announced the acquisition of 20 active aggregates operations for $2.05 billion and the divestiture of South Texas operations for $2.1 billion.

The transactions aim to enhance the Company's product mix, margin profile, and durability through cycles.

The acquisitions are expected to generate more than $180 million of annualized EBITDA.

The BWI Southeast transaction is expected to close later this year, subject to regulatory approvals and customary closing conditions.
Martin Marietta Materials, Inc.

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About MLM

martin marietta, an american company and a member of the s&p 500 index, is a leading supplier of aggregates and heavy building materials, with operations spanning 36 states, canada and the caribbean. martin marietta's magnesia specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products.