Argos increases its presence in Florida with acquisition

Argos has acquired cement, concrete, blocks and ports assets in Florida worth US$720 million from US-based Vulcan Materials Company. The transaction includes a 1.6 million tpa integrated cement plant in Newberry, which utilises dry technology, in addition to 1.9 million tpa grinding facilities in Tampa and Port Manatee. Argos has also purchased 69 ready-mix concrete plants with a total production capacity of 3.3 million m³, 13 concrete block production plants with a combined capacity of 109 million units pa and two port facilities.

The acquisition will enable Cementos Argos to strengthen its position in the US market as demand for construction materials increases. The new facilities double Argos’ cement production capacity, bringing it to 6.6 million tpa and making it the second largest cement manufacturer in Florida and the south-east. Following the purchase, Argos’ total installed capacity will rise to 20 million tpa of cement and 17 million m³ of concrete, across all the regions in which it operates.

“This new transaction fits perfectly with the company’s growth strategy, not only for the size and quality of the assets but also because of its privileged location, the growth potential and its complementary operation with our current assets. We are duplicating our cement production capacity in the United States, in a market like Florida, where the growth forecast for the coming years is expected to double the already encouraging growth estimates. Florida is one of the fourth largest state economies, with the highest cement consumption and population of the US,” stated Argos CEO Jorge Mario Velasquez.

Vulcan will retain all of its aggregates operations in Florida, as well as its cement segment's ground calcium operations. As part of the transaction with Argos, Vulcan has entered into a supply agreement to continue to provide aggregates to the divested concrete facilities, at market prices, for a period of 20 years.

"Divesting these non-core cement and concrete assets, at a full and fair valuation, allows us to further enhance our financial strength and strategic focus as the leading aggregates producer in the fastest-growing regions and urban markets of the United States," commented Don James, Vulcan's Chairman and Chief Executive Officer.

The transaction, which is subject to regulatory approval under the Hart-Scott-Rodino Act and customary closing conditions, is expected to close in 1Q14. Skadden is advising Cementos Argos S.A.

Adapted from press releases by Louise Fordham

Read the article online at: https://www.worldcement.com/the-americas/23012014/argos_acquires_florida_assets_from_vulcan_materials_638/