Martin Marietta Expands Aggregates Operations with $2.05 Billion Acquisition
Martin Marietta Materials has announced its plan to acquire 20 aggregates operations from Blue Water Industries for a whopping $2.05 billion in cash. The move is part of the company’s ambitious expansion in the southeastern region of the United States.
This acquisition comes on the heels of Martin Marietta’s recent divestiture, where it sold its South Texas cement and concrete operations to CRH Americas Materials for $2.1 billion in cash. These strategic transactions are aimed at optimizing the company’s portfolio and enhancing its aggregates-led product strategy.
The newly acquired operations are spread across various states, including Alabama, South Carolina, South Florida, Tennessee, and Virginia. They are expected to complement Martin Marietta’s existing footprint, particularly in the Nashville and Miami markets. The company anticipates adding approximately 1 billion tons of high-quality reserves, leading to an estimated annualized EBITDA of over $180 million.
Ward Nye, Chairman, President, and CEO of Martin Marietta, expressed his excitement about these transactions, which he says align perfectly with the company’s SOAR (Strategic Operating Analysis and Review) 2025 strategy. These acquisitions will reinforce Martin Marietta’s position in the aggregates sector and establish a strong foundation for both acquisitive and organic growth.
To fund the purchase, Martin Marietta will use its existing cash balance. The transaction is expected to close later this year, subject to regulatory approvals and customary closing conditions.
Martin Marietta is a prominent supplier of aggregates and heavy building materials, with operations spanning 28 states, Canada, and The Bahamas. In addition, the company also operates its Magnesia Specialties business, which specializes in producing magnesia and dolomitic lime products.
Investors and industry experts have hailed Martin Marietta for its financial resilience and strategic business moves. According to InvestingPro Insights, the company’s strong metrics and investor confidence are evident through its impressive 1 Year Price Total Return of 51.09%. Martin Marietta has also successfully delivered shareholder value with 8 consecutive years of dividend raises and a dividend growth rate of 12.12% over the last twelve months. The company’s current P/E Ratio stands at 30.44, supported by a robust financial performance and a revenue growth of 10.07% in the last quarter.
More information about these transactions, as well as Martin Marietta’s full-year results and 2024 outlook, will be shared during the company’s fourth-quarter and full-year 2023 earnings call.
Analyst comment
Positive news. The acquisition of 20 aggregates operations from Blue Water Industries for $2.05 billion will enhance Martin Marietta’s portfolio and product strategy. The newly acquired operations are expected to complement their existing footprint, leading to an estimated annualized EBITDA of over $180 million. Investors and industry experts have praised Martin Marietta for its financial resilience and strategic moves. The company’s strong metrics, consecutive dividend raises, and impressive price total return of 51.09% indicate investor confidence. The transaction is expected to close later this year.
