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Martin Marietta Materials, Inc. Files Definitive Proxy Materials And Sends Letter To Vulcan Materials Company Shareholders

Stocks in this article: MLM

The response of Vulcan’s Board of Directors and senior management to Martin Marietta’s business combination proposal has been particularly troubling. We believe that Vulcan’s Board and senior management have materially underestimated the significant synergies achievable through the proposed Martin Marietta-Vulcan combination. Rather than engaging with Martin Marietta to explore this compelling value-enhancing proposal, Vulcan has responded with public statements that seem to be based on unrealistic assumptions regarding the level and timing of an economic recovery and the attendant expected improvement in Vulcan’s results. Similarly, and apparently in response to Martin Marietta’s business combination proposal, Vulcan has now adopted a flawed and vague profit enhancement plan that is “too little, too late.”

Based on this track-record, there is no reason to think that Vulcan’s Board and senior management can now be counted on to maximize value for all Vulcan shareholders.

MARTIN MARIETTA’S PROPOSED COMBINATION WITH VULCAN IS VALUE-ENHANCING

The independent director nominees, if elected, will consider the proposed business combination objectively and in accordance with their fiduciary duties to Vulcan and Vulcan’s shareholders. In doing so, we believe they will see that our business combination proposal is value-enhancing to Vulcan shareholders and provides compelling benefits, including:

  • Strong Balance Sheet: The combined company will have one of the industry’s strongest balance sheets (leverage lowered from Vulcan’s current ~8X to ~4X LTM Adjusted EBITDA (earnings before interest, taxes, depreciation, depletion and amortization, adjusted for certain extraordinary and non-operating items), after synergies), enabling it to pay a dividend that is 20X Vulcan’s current dividend.
  • Global Industry Leadership: A combined Martin Marietta-Vulcan will be stronger and more competitive with an outstanding asset base, including over 28 billion tons of mineral reserves, and a broader set of opportunities for organic and inorganic growth.
  • Highly Complementary Businesses: The complementary footprints will give the combined company increased geographic reach across North America, and allow the combined company to improve efficiency in production and distribution and better serve its customers.
  • Combined Operational and Financial Discipline: Martin Marietta’s strict operational and financial discipline has resulted in one of the lowest SG&A percentages in the industry. Our SG&A as a percentage of net sales in 2011 was 8.2% as compared to 12.0% for Vulcan for the same period.
  • Substantial Cost Synergies and Value Creation: Martin Marietta has an indisputable track record of delivering targeted synergies and cost reductions across its business platforms and we are confident that we can achieve $200 million to $250 million in annual cost synergies. These are savings that would benefit directly shareholders of the combined company.

THE ONLY WAY FOR YOU TO HAVE A VOICE ON YOUR BOARD THAT WILL FAIRLY AND OBJECTIVELY CONSIDER MARTIN MARIETTA’S COMPELLING BUSINESS COMBINATION PROPOSAL IS TO VOTE FOR THE INDEPENDENT DIRECTOR NOMINEES ON THE BLUE PROXY CARD.

VOTE THE BLUE PROXY CARD TODAY!

BE REPRESENTED BY INDEPENDENT DIRECTORS

Let your voice be heard! Elect independent directors who are committed to looking out for YOUR best interests and who will bring a fresh, independent perspective on Martin Marietta’s business combination proposal. Send a message to Vulcan’s Board and senior management that they should engage directly with Martin Marietta in order to deliver promptly the benefits of the proposed transaction to you, the actual owners of Vulcan.

Your vote is extremely important. We urge you to vote for the four independent director nominees proposed by Martin Marietta. Please sign, date and return the enclosed BLUE proxy card in the postage paid envelope. Whether you hold your shares directly or through a broker you can also vote via the Internet or by telephone by following the enclosed instructions. You will need your “control number” to vote via the Internet or by telephone. Your “control number” appears on your BLUE proxy card or, if you hold your shares with a broker, your BLUE voting instruction form.

Please vote each and every BLUE proxy card and/or BLUE voting instruction form you receive. Even if you have returned a white proxy card or voting instruction form, you have every right to change your vote by returning a later-dated BLUE proxy card or BLUE voting instruction form. If you have any questions or need assistance voting your shares, please contact the firm assisting us with our exchange offer and solicitation, Morrow & Co., at (877) 757-5404 (toll-free), (203) 658-9400 or via email at blueproxy@morrowco.com.

Thank you in advance for your support.

C. Howard NyePresident and CEOMartin Marietta Materials, Inc.

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