The Eagle Materials Inc. Board of Directors approved a plan in 2019 to separate its heavy and light materials businesses into independent, publicly-traded companies by means of a tax-free spin-off to Eagle shareholders. Significant progress has been made on this plan since the announcement, and the Company continues to target the summer of 2020 for the completion of the separation.
The Board of Directors has announced the selection of the Chairman and CEO for each of the two companies, which would become effective upon the completion of the spin-off.
The heavy materials business will be spun-off and will be named Eagle Materials Inc. Mike Nicolais, current Eagle Materials Chairman, will become Chairman of the Board of the spun-off company, and Eagle Materials’ current President and CEO, Michael Haack, will become President and CEO.
The light materials business will be named American Gypsum Company. Dave Powers, former Eagle Materials CEO and current Eagle Materials board member, will become the Chairman of American Gypsum. Craig Kesler, current CFO of Eagle Materials, will become the President and CEO of American Gypsum.
These decisions lay the groundwork for further decision-making with respect to the separation that will be made and communicated over the coming months, including decisions pertaining to matters such as the broader leadership teams and the capital structures for the two companies.
Mike Nicolais, Eagle’s Chairman, remarked, “It is a board imperative that both companies be launched this year with the experienced leadership required to assure continued success and to provide continuity on the factors that have made these businesses the benchmark operating performers in their respective industries. We are fortunate to have great leadership options due to the strength and experience in our ranks. Dave Powers led the American Gypsum organisation for 11 years before becoming the President and CEO of Eagle Materials. Craig Kesler is a 16-year Eagle veteran and has served as CFO for the past 11 years. This degree of continuity and directly-relevant experience gives us every confidence that the transition into creating two separate, top-performing companies will be seamless and that both companies will continue to generate value for all shareholders.”
Heavy materials business
After the separation, the company’s existing Heavy Materials business, a US-heartland cement-plant system with complementary concrete, aggregates and sand operations, is expected to continue to produce strong margins and cash flows. The business enjoys long-lived, owned raw material reserves that will sustain its operations over the long term.
Light materials business
Upon separation, Eagle’s existing light materials business is hoped to continue as a top performing producer of gypsum wallboard and recycled paperboard. The business includes an integrated paperboard mill that utilises technologies to supply the wallboard plants with high-performing, low-cost facing paper. The business enjoys long-lived raw material reserves.
Upon completion of the transaction, each company is expected to be publicly listed and traded on the New York Stock Exchange. Both companies are expected to remain headquartered in Dallas, TX.
Read the article online at: https://www.worldcement.com/the-americas/12022020/eagle-materials-separates-light-and-heavy-materials-businesses/