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Commercial Metals To Buy Concrete Pipe & Precast For $675 Mln; Shares Down Pre-market

By RTTNews Staff Writer   ✉   | Published:   | Follow Us On Google News

Commercial Metals Co. (CMC), on Thursday announced that it has entered into a definitive agreement to acquire Concrete Pipe & Precast, LLC from Eagle Corp. and ECPP, LLC for a cash purchase price of $675 million.

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

The purchase price represents a multiple of 9.5x Concrete Pipe & Precast's forecasted 2025 EBITDA, or about 8.5x when anticipated cash tax benefits are included.

By year three, annual run-rate synergies of $5 million to $10 million are anticipated, primarily from optimization initiatives.

The company said that the business is expected to deliver higher and more stable margins than CMC's traditional steel operations, with greater cash flow conversion.

In the pre-market trading, 3.80% lesser at $56.26 on the New York Stock Exchange.

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