Transaction Creates Market Leading Supplier
of Aggregates and Heavy Building Materials
Martin Marietta Materials, Inc. (NYSE:MLM) today announced that
it has completed its acquisition of Texas Industries, Inc.
(NYSE:TXI), creating a market leading supplier of aggregates and
heavy building materials. The transaction enhances Martin
Marietta’s position as an aggregates-led, low cost operator in the
perennially largest and fastest growing geographies in the United
States. With a leading U.S. aggregates position, the acquisition
provides complementary, high quality assets in cement and ready mix
concrete, augmented by the company’s best-in-class long-haul
transportation network. The transaction was overwhelmingly approved
by shareholders of both companies at their respective special
meetings on June 30, 2014. Based on the closing price of Martin
Marietta stock on July 1, 2014, the combined company has a market
capitalization of approximately $8.8 billion.
Ward Nye, Martin Marietta’s Chairman, President and Chief
Executive Officer, said, “We are excited to move forward as one
company that is even better positioned to deliver increased value
to shareholders, customers and employees. Uniting our complementary
assets and leveraging our expanded geographic footprint provides
Martin Marietta with an expanded platform for growth. In
particular, Martin Marietta will benefit from greater exposure to
the expanding cement markets in Texas and California - two of the
largest and fastest growing markets for construction materials
in the United States. I look forward to continuing to work
closely with our team and all of our employees, including our new
team members from TXI, to ensure a seamless transition as we
continue to deliver superior product offerings and service to
customers.”
Martin Marietta is well-positioned for long-term growth, with a
network of more than 400 facilities spanning 36
states, Canada, and the Caribbean Islands. The company is
a leading aggregates producer, and the increased scale and
geographic and product diversity resulting from the transaction
provides a broader set of opportunities for growth. In addition,
select vertical integration is expected to reduce distribution and
transportation costs, diversify end-markets and drive other value
enhancing efficiencies. The company has an outstanding asset base
to deliver superior product offerings and service to customers.
Financial Benefits of the Transaction
Martin Marietta continues to expect that the combination will
generate approximately $70 million of annual pre-tax
synergies by calendar year 2017, which would correspond to more
than $500 million of total value creation for
shareholders. Integration of the acquired business is underway and
proceeding as planned. The company anticipates the transition to
its target operating model to be completed by the end of the year.
The combination is expected to be both accretive to Martin
Marietta's earnings per share in 2014, excluding one-time costs;
and cash flow accretive in the first full year following
integration.
In addition, Martin Marietta continues to expect to utilize
Texas Industries' more than $400 million in existing NOLs
over the next few years. The company also believes that there is an
opportunity to realize incremental value from the expected
divestiture of identified non-operating real estate assets.
Delisting of Texas Industries
As a result of the completion of the merger, the common stock of
Texas Industries, Inc. is no longer listed for trading on the New
York Stock Exchange.
Advisors
J.P. Morgan, Deutsche Bank and Barclays acted as Martin
Marietta’s financial advisors and Cravath, Swaine & Moore LLP
acted as its legal advisor. Citigroup acted as Texas Industries’
financial advisor, and Wachtell, Lipton, Rosen & Katz acted as
its legal advisor.
About Martin Marietta Materials Inc.
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, and dedicated teams transforming more than 100 years of
irreplaceable natural resources into the roads, sidewalks and
foundations on which we live. Martin Marietta’s Magnesia
Specialties business provides a full range of magnesium oxide,
magnesium hydroxide and dolomitic lime products. For more
information, visit www.martinmarietta.com or
www.magnesiaspecialties.com.
Cautionary Statements Regarding Forward-Looking
Statements
Certain statements in this communication regarding the
acquisition by Martin Marietta, benefits and synergies of the
transaction, future opportunities for the combined company and
products and any other statements regarding Martin Marietta’s
future expectations, beliefs, plans, objectives, financial
conditions, assumptions or future events or performance that are
not historical facts are “forward-looking” statements made within
the meaning of Section 21E of the Securities Exchange Act of 1934.
These statements are often, but not always, made through the use of
words or phrases such as “may”, “believe,” “anticipate,” “could”,
“should,” “intend,” “plan,” “will,” “expect(s),” “estimate(s),”
“project(s),” “forecast(s)”, “positioned,” “strategy,” “outlook”
and similar expressions. All such forward-looking statements
involve estimates and assumptions that are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from the results expressed in the statements.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are the following: the possibility that Martin Marietta may be
unable to achieve expected synergies and operating efficiencies in
connection with the transaction within the expected time-frames or
at all and to successfully integrate TXI’s operations into those of
Martin Marietta; the integration of TXI’s operations into those of
Martin Marietta being more difficult, time-consuming or costly than
expected; operating costs, customer loss and business disruption
(including, without limitation, difficulties in maintaining
relationships with employees, customers, clients or suppliers)
being greater than expected following the transaction; the
retention of certain key employees of TXI being difficult; Martin
Marietta’s ability to adapt its services to changes in technology
or the marketplace; Martin Marietta’s ability to maintain and grow
its relationship with its customers; levels of construction
spending in the markets; a decline in the commercial component of
the nonresidential construction market and the subsequent impact on
construction activity; a slowdown in residential construction
recovery; unfavorable weather conditions; a widespread decline in
aggregates pricing; changes in the cost of raw materials, fuel and
energy and the availability and cost of construction equipment in
the United States; the timing and amount of federal, state and
local transportation and infrastructure funding; the ability of
states and/or other entities to finance approved projects either
with tax revenues or alternative financing structures; and changes
to and the impact of the laws, rules and regulations (including
environmental laws, rules and regulations) that regulate Martin
Marietta’s operations. Additional information concerning these and
other factors can be found in Martin Marietta’s and TXI’s filings
with the Securities and Exchange Commission (the “SEC”), including
Martin Marietta’s and TXI’s most recent Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K. These risks, as well as other risks associated with Martin
Marietta’s acquisition of TXI are also more fully discussed in the
joint proxy statement/prospectus included in the Form 424B3 that
Martin Marietta filed with the SEC on May 30, 2014 in connection
with the acquisition. Martin Marietta assumes no obligation to
update or revise publicly the information in this communication,
whether as a result of new information, future events or otherwise,
except as otherwise required by law. Readers are cautioned not to
place undue reliance on these forward-looking statements that speak
only as of the date hereof.
Martin Marietta Materials, Inc.Anne H. Lloyd,
919-783-4660Executive Vice President and Chief Financial
Officerwww.martinmarietta.com
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