News2021-09-01T17:32:40+00:00

Articles & Briefs

Green producers: Who are they?

As we move into a post-COVID era with regular reminders of Green New Deals, electric cars, solar power, wind farms, sustainability reports, net zero carbon goals, and the like, our performance conversations are changing. The idea of “green” is becoming a larger and larger topic in the business. Consider what being “green” really means. Does it not refer to a clean and efficient use of resources? Maximizing valued output and minimizing consumption and non-valued outputs? A green producer is just a great producer...and they should be celebrated.

Epic aggregates due diligence fails

Replacing reserves with greenfield developments or acquiring existing aggregate operations is important to the long-term viability of your aggregates business. Unfortunately, we see many cases in which projects are crippled or doomed because fatal flaws with the geology are missed or ignored. In the aggregates industry, we cannot mitigate all the risks. The true nature of the geology is hidden below the ground, and the information needed to move forward with confidence costs time and money. But it is worth it. A well-planned geologic investigation, conducted by a professional who is experienced in aggregates, can identify critical risk factors that could threaten the success of the project...and ultimately save you millions of dollars.

Optimism in the industry?

Martin Marietta's announced acquisition of Lehigh Hanson’s west region business offers two takeaways: one, the valuation multiple is high even by today’s elevated standards; and two,  forward-looking optimism is abundant in the industry at present.

Selling to an in-market player

If you want to sell your construction materials business, the most likely buyer will be among your customers, competitors, or suppliers. This raises an obvious question: how can you share sensitive information about your business without getting buried by in-market buyers who ultimately may fail to consummate a deal. This article looks at what information you need to protect, how to install a "seller-friendly" confidentiality agreement, and controlling the flow of information so you can minimize your exposure to risk while selling to the most qualified bidder at the highest price.

Is now the time to sell for independent ready mix producers?

According to National Ready Mix Concrete Association (NRMCA) the construction materials industry experienced four complete up and down cycles between 1975 and 2010.The four expansion periods ranged from three to ten years, with an average duration of 5.6 years. The four contraction periods ranged from one to five years, with an average duration of 3 years. Today, the industry has been in an expansion period that has persisted since 2011, a period of 5.7 years. This is greater than the average expansion period of the past four cycles, so the question is not if the current expansion will reverse but rather when will it reverse…and whether or not trying to perfectly time the sale of your business is a sound strategy.

The reaction to Martin Marietta’s and U.S. Concrete’s earnings reports underscores how market expectations drive results

During the week of November 1, construction materials industry leaders U.S. Concrete and Martin Marietta released their 3Q 2015 earnings reports. Each company delivered strong growth in both revenue and earnings, but the market response to each’s results could not have been more different. While U.S. Concrete shares realized a 9 percent increase in pre-market trading following its earnings release, Martin Marietta’s stock dropped 8.5 percent following its announcement.

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