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Martin Marietta (MLM) Buys BWI Southeast's Aggregates Operations
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Martin Marietta Materials, Inc. (MLM - Free Report) recently completed the acquisition of its previously announced 20 active aggregate operations from Blue Water Industries’ affiliates, BWI Southeast.
The company signed the deal on Feb 11, 2024, for $2.05 billion and completed the process on Apr 5. MLM now owns 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia, which will complement its existing presence in the Southeast, opening new growth opportunities in targeted markets such as Nashville and Miami.
Shares of this Zacks Rank #3 (Hold) company have gained 0.3% on Apr 8 and 24.6% in the year-to-date period versus the Zacks Building Products - Concrete and Aggregates industry’s 20% rally.
Image Source: Zacks Investment Research
The move aligns with the company’s Strategic Operating Analysis and Review (SOAR) 2025 aggregates-focused strategy. Martin Marietta’s SOAR includes portfolio optimization, assessing business combinations and arrangements with other companies engaged in similar businesses, increasing footprint in core businesses, investing in internal expansion projects in high-growth markets, as well as pursuing new opportunities associated with the existing markets served.
On Jan 16, 2024, the company announced that it had acquired Albert Frei & Sons, Inc. (“AFS”), a prominent aggregates producer in Colorado. The deal, sealed on Jan 12, 2024, brings over six decades of high-quality hard rock reserves, fortifying Martin Marietta’s position in the high-growth Denver metropolitan area.
The recent acquisition of AFS and the ongoing transaction with BWI Southeast, these two pure-play aggregates deals offer approximately 1 billion tons of proven, high-quality reserves and are projected to generate more than $180 million of annualized EBITDA. These strategic transactions enhance MLM’s product mix, margin profile and resilience across economic cycles. It also offers flexibility for future growth, both through acquisitions and organic expansion.
Meanwhile, the company has been reviewing its overall portfolio for opportunities to maximize value by monetizing or exchanging select assets. On Feb 9, MLM concluded the sale of its South Texas cement and associated concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.1 billion in cash. The proceeds from these divestitures are expected to enhance capital allocation priorities, facilitating higher-return, external and organic growth investments to further enhance shareholder value.
Overall, these portfolio optimization moves are aimed at bolstering the strength of the business through economic cycles and enhancing the margin profile.
Zacks Rank & Key Picks
MLM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Construction sector are:
The Zacks Consensus Estimate for WLDN’s 2024 sales and earnings per share (EPS) indicates growth of 3.9% and 3.4%, respectively, from the year-ago levels.
Vulcan Materials Company (VMC - Free Report) currently sports a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average.
The Zacks Consensus Estimate for VMC’s 2024 sales and EPS indicates an improvement of 1.3% and 19.7%, respectively, from a year ago.
Eagle Materials Inc. (EXP - Free Report) currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for EXP’s 2024 sales and EPS indicates an improvement of 5.5% and 14.1%, respectively, from a year ago.
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Martin Marietta (MLM) Buys BWI Southeast's Aggregates Operations
Martin Marietta Materials, Inc. (MLM - Free Report) recently completed the acquisition of its previously announced 20 active aggregate operations from Blue Water Industries’ affiliates, BWI Southeast.
The company signed the deal on Feb 11, 2024, for $2.05 billion and completed the process on Apr 5. MLM now owns 20 active aggregates operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia, which will complement its existing presence in the Southeast, opening new growth opportunities in targeted markets such as Nashville and Miami.
Shares of this Zacks Rank #3 (Hold) company have gained 0.3% on Apr 8 and 24.6% in the year-to-date period versus the Zacks Building Products - Concrete and Aggregates industry’s 20% rally.
Image Source: Zacks Investment Research
The move aligns with the company’s Strategic Operating Analysis and Review (SOAR) 2025 aggregates-focused strategy. Martin Marietta’s SOAR includes portfolio optimization, assessing business combinations and arrangements with other companies engaged in similar businesses, increasing footprint in core businesses, investing in internal expansion projects in high-growth markets, as well as pursuing new opportunities associated with the existing markets served.
On Jan 16, 2024, the company announced that it had acquired Albert Frei & Sons, Inc. (“AFS”), a prominent aggregates producer in Colorado. The deal, sealed on Jan 12, 2024, brings over six decades of high-quality hard rock reserves, fortifying Martin Marietta’s position in the high-growth Denver metropolitan area.
The recent acquisition of AFS and the ongoing transaction with BWI Southeast, these two pure-play aggregates deals offer approximately 1 billion tons of proven, high-quality reserves and are projected to generate more than $180 million of annualized EBITDA. These strategic transactions enhance MLM’s product mix, margin profile and resilience across economic cycles. It also offers flexibility for future growth, both through acquisitions and organic expansion.
Meanwhile, the company has been reviewing its overall portfolio for opportunities to maximize value by monetizing or exchanging select assets. On Feb 9, MLM concluded the sale of its South Texas cement and associated concrete operations to CRH Americas Materials, Inc., a subsidiary of CRH plc, for $2.1 billion in cash. The proceeds from these divestitures are expected to enhance capital allocation priorities, facilitating higher-return, external and organic growth investments to further enhance shareholder value.
Overall, these portfolio optimization moves are aimed at bolstering the strength of the business through economic cycles and enhancing the margin profile.
Zacks Rank & Key Picks
MLM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Construction sector are:
Willdan Group, Inc. (WLDN - Free Report) currently sports a Zacks Rank #1 (Strong Buy). WLDN delivered a trailing four-quarter average earnings surprise of a whopping 886.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WLDN’s 2024 sales and earnings per share (EPS) indicates growth of 3.9% and 3.4%, respectively, from the year-ago levels.
Vulcan Materials Company (VMC - Free Report) currently sports a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average.
The Zacks Consensus Estimate for VMC’s 2024 sales and EPS indicates an improvement of 1.3% and 19.7%, respectively, from a year ago.
Eagle Materials Inc. (EXP - Free Report) currently carries a Zacks Rank #2 (Buy). It delivered a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for EXP’s 2024 sales and EPS indicates an improvement of 5.5% and 14.1%, respectively, from a year ago.