NEW YORK (TheStreet) Vulcan Materials (VMC) aid Wednesday it has a deal in place to sell its cement and concrete operations in Florida and southern Georgia to Colombia's Cementos Argos for $720 million in cash, a major milestone in the company's effort to overhaul its operations.
Birmingham, Ala.-based Vulcan, the target of a hostile takeover effort in 2012, said that under the terms of the deal it would retain all of its aggregates operations in Florida. Vulcan, the nation's largest producer of construction aggregates, has also entered into a supply agreement to provide materials to the divested facilities at market prices for 20 years.
The assets to be acquired by Cementos Argos include Vulcan's Newberry, Fla., cement plant; Tampa and Port Manatee cement terminals; 69 ready-mixed concrete sites; and 13 concrete block and building material sites. Combined, the assets recorded a loss of $1 million in Ebitda on sales of $153 million in the nine months ending Sept. 30.
Concurrent with the sale, Vulcan said it would initiate a tender offer to purchase $500 million in outstanding debt.
The deal is the latest step in an asset sale plan Vulcan initiated in February 2012, when the company was the target of a $4.9 billion hostile takeover bid from Martin Marietta Materials (MLM) The company said that, with the deal, it has now raised more than $1 billion in proceeds and reduced debt by $800 million, while investing more than $240 million to acquire aggregates quarries and reserves in California, Georgia, Texas and Virginia.