Martin Marietta (MLM) Expands Southeast Reach With $2.05B Buyout
Martin Marietta Materials, Inc. MLM has announced the acquisition of 20 active aggregate operations from affiliates of Blue Water Industries LLC (BWI Southeast). The deal, valued at $2.05 billion, includes operations in Alabama, South Carolina, South Florida, Tennessee and Virginia.
The company entered into a definitive agreement for this acquisition on Feb 11, 2024. The transaction will be funded with balance sheet cash and is anticipated to conclude later this year.
Furthermore, on Feb 9, 2024, the company successfully 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.
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. These moves align with the company’s Strategic Operating Analysis and Review (SOAR) 2025 aggregates-focused strategy. The acquisition of BWI Southeast complements MLM's existing presence in the southeast, opening new growth opportunities in targeted markets such as Nashville and Miami.
Acquisitions to Drive Growth
On Jan 16, 2024, the company announced that it has 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.
Overall, these portfolio optimization moves are aimed at bolstering the strength of the business through economic cycles and enhancing the margin profile. Meanwhile, the company has been reviewing its overall portfolio for opportunities to maximize value by monetizing or exchanging select assets. 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.
Price Performance
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Shares of this leading supplier of construction aggregates in the United States have gained 49.4% in the past year, outperforming the Zacks Building Products - Concrete and Aggregates industry’s 40.6% growth. Martin Marietta is benefiting from its strong presence in public construction and value-accretive acquisitions. The company places a significant focus on its long-term strategic plans, particularly the positive outlook for the SOAR 2025 initiatives, signaling promising prospects ahead.
Zacks Rank & Key Picks
Martin Marietta currently carries a Zacks Rank #3 (Hold).
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