Commercial Metals To Acquire Foley Products For $1.84 Bln Cash

Commercial Metals

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(RTTNews) - Commercial Metals Co. (CMC) announced Thursday it has entered into a definitive agreement to acquire Foley Products Co. for a cash purchase price of $1.84 billion, subject to customary purchase price adjustments.

Foley Products is the largest regional supplier of precast concrete solutions in the United States and leader within the Southeastern U.S.

The proposed acquisition unlocks incremental upside from recently announced Concrete Pipe & Precast (CP&P) acquisition with complementary footprint in high-growth markets and line of sight to meaningful synergy opportunities.

The transaction is expected to be immediately accretive to earnings per share and free cash flow per share.

Following the proposed acquisitions of Foley and CP&P, CMC will operate 35 facilities across 14 states, creating the third-largest precast platform in the United States and a leader in the Mid-Atlantic and Southeast.

CMC has identified approximately $25 million to $30 million of operational annual run-rate synergies between Foley and CP&P by year three, with more expected to be identified in the future.

In addition to the cost synergies, CMC expects to deliver commercial synergies through cross-selling and enhancing product capabilities across geographies.

The transaction, which has been approved by the boards of directors of CMC and Foley Products, is expected to close in a timely manner following customary regulatory review and is subject to customary closing conditions. The Company has obtained a commitment for financing to complete the transaction.