Corporate News Blog – Vulcan Materials Enters into Agreement to Acquire Polaris Materials

Research Desk Line-up: Martin Marietta Materials Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 30, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for leading producer of construction aggregates and other construction materials in America,Vulcan Materials Co. (NYSE: VMC) (“Vulcan”), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=VMC. The Company announced on August 28, 2017, that it entered into a definitive agreement to acquire Polaris Materials Corp. (“Polaris”), an aggregates and logistics company. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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Discover more of our free reports coverage from other companies within the General Building Materials industry. Pro-TD has currently selected Martin Marietta Materials, Inc. (NYSE: MLM) for due-diligence and potential coverage as the Company reported on August 01, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Martin Marietta Materials when we publish it.

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Inorganic Growth Path for Vulcan

Vulcan is a member of the S&P 500 index with headquarters in Birmingham, Alabama. Vulcan has been following a systematic inorganic strategy for expansion since becoming a public Company in 1956. In the first six months of 2017, the Company completed acquisitions worth around $212 million. These buyouts have been initiated to enhance Vulcan’s ability to serve customers and bring in operational and commercial synergies.

Financial Details

According to the agreement, Vulcan would acquire all of the issued and outstanding shares of Polaris Materials through its indirect subsidiary for C$2.79 per share in cash by way of a statutory plan of arrangement under the Business Corporations Act of British Columbia.

This price indicates an aggregate fully diluted equity value of around C$252 million for Polaris.

This price signifies a premium of 191% to Polaris’ closing share price of C$0.96, as on August 25, 2017 and premium of 194% to the volume weighted average price of Polaris’ shares over the last 10 trading days.

Polaris Holds Strong Position in California and British Columbia

Polaris, which is headquartered in Vancouver, provides high-quality construction aggregates to major coastal markets in California and British Columbia. Due to its strategically located operations in British Columbia, Polaris is able to serve key Californian markets.

The business of Polaris includes a high capacity aggregates processing plant and deep water port on Vancouver Island. The Company also holds associated long-term aggregate reserves and five distribution yard outlets in the San Francisco Bay Area and in Long Beach, California.

Polaris has created an integrated logistical chain of mineral resources, receiving port terminals and cost effective, contracted shipping. This fulfills the Company’s need for replacement aggregate sources in markets where local resources are depleting and marine imported aggregates provide an increasingly viable alternative.

Agreement would Strengthen Vulcan’s Position in California

Tom Hill, Vulcan’s Chairman and Chief Executive Officer, expressed his pleasure on entering into this agreement to acquire Polaris Materials. He anticipates that this will further boost Vulcan’s ability to serve major California markets. In fact, this move will help Vulcan maintain as well as strengthen its industry-leading position in California.

The strategic benefits from the deal include the following:

Diversification in products as well as geographies:Polaris has assembled high-quality aggregate reserves. Thus, the acquisition will further broaden Vulcan’s product offerings, mainly for its concrete applications. Moreover, the deal will expand Vulcan’s geographic coverage in markets in the San Francisco and Los Angeles metro areas.

Stronger logistical capabilities:This acquisition is also expected to improve Vulcan’s logistics capabilities with the ship delivery of aggregate products. It will provide Vulcan with a platform for future distribution outlet opportunities along the Pacific Coast.

Strategic Timing:The acquisition is strategically timed. California’s recent passage of SB1 is expected to provide $52 billion for key transportation infrastructure projects over the next ten years. It will also provide a passage of local ballot measures, which would add over $1 billion annually for infrastructure projects in key growth markets that Vulcan serves.

A Special Committee to Supervise the Transaction

For the transaction, Polaris’ Board of Directors formed a special committee comprising of its independent directors to supervise the process undertaken as well as to negotiate and review the transaction. In this regard, the Special Committee and the Board of Directors have unanimously recommended that Polaris’ shareholders, option-holders, and deferred unit holders of vote in favor of the transaction.

However, Polaris is allowed to terminate the Arrangement Agreement in special circumstances. It includes a permission to the Board of Directors to accept a superior proposal subject to specific conditions, including Vulcan’s “right to match” and the payment of a termination fee of C$10 million.

Transaction Closing

As of now, the transaction is subject to approval by Polaris Materials’ security holders. The approval by the Supreme Court of British Columbia and other customary closing conditions are also pending.

Once the required approvals are obtained, the transaction is expected to close in November 2017.

Last Close Stock Review

At the close of trading session on Tuesday, August 29, 2017, Vulcan Materials’ stock price was slightly up 0.48% to end the day at $116.50. A total volume of 1.77 million shares were exchanged during the session, which was above the 3-month average volume of 1.15 million shares. The Company’s shares are trading at a PE ratio of 36.72 and have a dividend yield of 0.86%. At Tuesday’s closing price, the stock’s net capitalization stands at $15.57 billion.

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