This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Martin Marietta bids $2.7B for Texas Industries

Construction materials supplier Martin Marietta Materials  (MLM) finally found a partner, agreeing Tuesday to acquire Texas Industries  (TXI) for $2.7 billion in stock and assumed debt.

Terms of the deal call for Raleigh, N.C.-based Martin Marietta to pay 0.7 of its shares for each share of Texas Industries. The deal values Texas Industries at $71.95 per share, a premium of less than 1% from Monday's close but 15% above the average closing prices of the two companies since Dec. 12 when word of a potential deal first leaked.

As part of the deal Martin Marietta would assume about $700 million in Texas Industries debt. Martin Marietta said it expects to extract about $70 million in pre-tax synergies by 2017, and said it believes the deal will immediately contribute to earnings per share.

The deal comes less than two years after Martin Marietta made an unsuccessful hostile bid for rival Vulcan Materials (VMC) offering $4.9 billion for the Birmingham, Ala.-based target. The company has been eager to build its scale as a provider of construction aggregates and expand its geographic reach ahead of an expected recovery in the housing market.

Dallas-based Texas Industries is the largest producer of cement in its home state and a major producer in California. Martin Marietta said that the purchase would add about 800 million tons of aggregates reserves, creating a company with a network of more than 400 quarries, mines, distribution yards and plants spanning 36 states, Canada and the Caribbean.

"By uniting Martin Marietta's and Texas Industries' complementary assets and leveraging an expanded geographic footprint, we will be even better-positioned to deliver value to our shareholders and customers," Martin Marietta CEO Ward Nye said in a statement. "Texas Industries' aggregates operations are strategically located in high growth markets and fit well into our existing portfolio, and its cement operations will further diversify our product and customer mix."

Texas Industries CEO Mel Brekhus called the deal "a unique opportunity to create a more competitive company with a solid, diversified portfolio of assets, enhanced credit profile and a strong balance sheet." The company's two largest shareholders, who together own about 51% of its shares outstanding, have pledged support for the transaction.

Martin Marietta received financial advice from JPMorgan Chase (JPM), a Deutsche Bank (DB) team of Paul Stefanick, Tom Bradshaw, James Ratigan and Scott Spieth and Barclays' Richard Siegel and Mark Hudson. A Cravath, Swaine & Moore team including partners Scott A. Barshay, George F. Schoen, Eric W. Hilfers, Andrew W. Needham and Matthew Morreale providing legal counsel.

Nathan Eldridge and Milad Hadziabdic from Citigroup  (C) advised Texas Industries. Mark Gordon and Gordon Moodie of Wachtell, Lipton, Rosen & Katz provided legal counsel.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,067.56 -30.89 -0.18%
S&P 500 2,002.28 -1.09 -0.05%
NASDAQ 4,598.1880 +17.9170 0.39%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs