Quikrete to take Summit Materials private in deal valued at $11.5 billion

By Aatreyee Dasgupta and Kannaki Deka

(Reuters) -Summit Materials said on Monday rival Quikrete would acquire the company in a cash deal valued at $11.5 billion, in a move to capitalize on higher demand for building materials.

The sector's deal-making activity has been heating up due to rising U.S. government infrastructure spending and anticipation of growing demand for materials.

Summit had said in October it expected public infrastructure to remain a source of steady activity in 2025.

The company's shares, however, have been trading at a discount to its industry peers such as Vulcan Materials (NYSE:VMC ) and Martin Marietta Materials (NYSE:MLM ) .

Privately held Quikrete had approached Summit with an acquisition offer in October, Reuters had reported.

The concrete maker's $52.50 per share offer represents about a 29.2% premium to Summit's closing price on Oct. 23, a day before Reuters reported the talks.

Quikrete's offer equates to an about $9.2 billion deal on an equity basis, according to a Reuters calculation.

Founded in 1940, Atlanta, Georgia-based Quikrete is one of the largest manufacturers of packaged concrete and cement mixes in North America.

Denver, Colorado-based Summit is a provider of construction materials such as cement, ready-mix concrete and asphalt. It also offers services such as construction and paving.

Morgan Stanley (NYSE:MS ) and Evercore acted as financial advisors to Summit, while Davis Polk & Wardwell LLP served as its legal advisor.

Wells Fargo (NYSE:WFC ) served as a financial advisor to Quikrete and provided a debt-financing commitment for the transaction.

The transaction is expected to close in the first half of 2025.

Shares of Summit fell about 2% in premarket trading.

Source: Investing.com