– Transaction Advances Portfolio Simplification and Reflects
Ongoing Commitment to Shareholder Value Creation – Proceeds to be
Invested in Construction Products Opportunities
Arcosa, Inc. (NYSE: ACA) (“Arcosa” or the “Company”), a provider
of infrastructure-related products and solutions, today announced
it has entered into a definitive agreement to sell its storage
tanks business to Black Diamond Capital Management, LLC for $275
million in cash, subject to customary transaction adjustments.
Established in 1933 and marketed under the Arcosa Tank and TATSA
brands, the Company’s storage tanks business is a leading
manufacturer of steel pressure tanks for the storage and
transportation of propane, ammonia and other gases serving the
residential, commercial, energy, and agricultural markets with
operations in the U.S. and Mexico. Reported within the Company’s
Engineered Structures segment, revenues were approximately $200
million in 2021. Following the transaction, the Company will
continue to maintain a strategic manufacturing platform in Mexico,
primarily supporting its Engineered Structures segment with the
flexibility to manufacture other Arcosa products.
The transaction is expected to close in the second half of the
year, subject to regulatory approvals in the U.S. and Mexico and
other customary closing conditions. Further transaction details
will be provided during Arcosa’s first quarter 2022 earnings
conference call.
Antonio Carrillo, President and CEO of Arcosa commented,
“Today’s announcement represents a significant milestone in the
advancement of our long-term vision to reduce the complexity of
Arcosa’s overall portfolio and focus on strategic growth in select
markets where we can achieve a sustainable competitive
advantage.”
“At spin, we prioritized improving the margins of our storage
tanks business, which was unprofitable in 2018. Our team has done a
fantastic job introducing lean initiatives and reinvigorating
growth in this business, creating an attractive platform for future
capital investment. I am confident in their continued success under
the focused ownership of Black Diamond. I want to thank our
employees and customers for their significant contributions to
Arcosa, and we expect Arcosa Tank’s reputation for best-in-class
products to continue with this transaction.”
Carrillo continued, “The transaction is expected to close later
this year, and we intend to invest the proceeds in our Construction
Products platform as we continue to shift our business mix toward
less cyclical, higher-margin growth opportunities that leverage our
core strengths and drive long-term shareholder value creation.”
Evercore served as financial advisor to Arcosa, while Gibson,
Dunn & Crutcher LLP and Creel, García-Cuéllar, Aiza y Enriquez,
S.C. served as its legal advisors.
About Arcosa
Arcosa, Inc., headquartered in Dallas, Texas, is a provider of
infrastructure-related products and solutions with leading
positions in construction, engineered structures, and
transportation markets. Arcosa reports its financial results in
three principal business segments: the Construction Products
segment, the Engineered Structures segment, and the Transportation
Products segment. For more information, visit www.arcosa.com.
About Black Diamond
Black Diamond Capital Management (“Black Diamond”) is a leading
privately held alternative asset management firm with over $9
billion in assets under management across complimentary private
equity, hedge fund, mezzanine and CLO/structured strategies. Black
Diamond’s private equity platform focuses on partnering with middle
market companies in market leadership positions, often within
sectors characterized by material tangible assets. Black Diamond’s
credit business specializes in high yield credit, stressed and
distressed credit, restructurings and business turnarounds, further
focusing on investing in debt securities that offer structural
protection and have substantial underlying assets. Founded in 1995,
Black Diamond employs 40 investment professionals and has offices
in Stamford CT, St Thomas USVI, and London, England.
Some statements in this release, which are not historical facts,
are “forward-looking statements” as defined by the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements about Arcosa’s estimates,
expectations, beliefs, intentions or strategies for the future.
Arcosa uses the words “anticipates,” “assumes,” “believes,”
“estimates,” “expects,” “intends,” “forecasts,” “may,” “will,”
“should,” “guidance,” “outlook,” “strategy,” and similar
expressions to identify these forward-looking statements.
Forward-looking statements speak only as of the date of this
release, and Arcosa expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein, except as required by
federal securities laws. Forward-looking statements are based on
management’s current views and assumptions and involve risks and
uncertainties that could cause actual results to differ materially
from historical experience or our present expectations, including
but not limited to assumptions, risks and uncertainties regarding
the impact of the COVID-19 pandemic on Arcosa’s customer demand for
Arcosa’s products and services, Arcosa’s supply chain, Arcosa’s
employees’ ability to work because of COVID-19 related illness, the
health and safety of our employees, the effect of governmental
regulations imposed in response to the COVID-19 pandemic;
assumptions, risks and uncertainties regarding achievement of the
expected benefits of Arcosa’s spin-off from Trinity; tax treatment
of the spin-off; failure to successfully integrate acquisitions or
divest any business, or failure to achieve the expected benefits of
acquisitions or divestitures; market conditions and customer demand
for Arcosa’s business products and services; the cyclical nature
of, and seasonal or weather impact on, the industries in which
Arcosa competes; competition and other competitive factors;
governmental and regulatory factors; changing technologies;
availability of growth opportunities; market recovery; ability to
improve margins; the impact of inflation and costs of materials;
and Arcosa’s ability to execute its long-term strategy, and such
forward-looking statements are not guarantees of future
performance. For further discussion of such risks and
uncertainties, see "Risk Factors" and the "Forward-Looking
Statements" section of "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Arcosa's Form
10-K for the year-ended December 31, 2021 and as may be revised and
updated by Arcosa's Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
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version on businesswire.com: https://www.businesswire.com/news/home/20220424005071/en/
INVESTOR CONTACTS Gail M. Peck Chief Financial Officer T
972.942.6500 InvestorResources@arcosa.com
Erin Drabek Director of Investor Relations
David Gold ADVISIRY Partners T 212.661.2220
David.Gold@advisiry.com
MEDIA CONTACT Media@arcosa.com
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