Summit Materials, based in Colorado, made a large purchase related to cement manufacturing during 2015. The purchase, which involved a cement plant and seven distribution terminals in another state, was made possible by a liquidation of U.S.-based assets from another holding company.
The other holding company was based outside of the country and recently merged with a third international corporation. As part of the merger, the new company liquidated a number of assets in the United States. Summit Materials was able to acquire the cement assets for $450 million in cash and a single cement distribution terminal. According to reports, the Colorado-based holding company paid $370 million up front for the deal and agreed to pay the remaining $80 million by the end of the year.
Summit Materials already owned several cement-related assets in the United States. It owned a distribution terminal in a third state and a cement plant in a fourth. The new acquisitions will complement the existing holdings and allow Summit to double production capacity, said the firm’s chief executive officer. The CEO also stated that the company expected to see immediate positive production and financial impacts related to the purchase.
This story represents an extremely large business purchase involving multiple international entities. Not all business transactions are so global in nature, but even small or local transactions can become complicated. Understanding how legal and regulatory matters might impact sales, dissolutions and M&A activity is essential to moving forward with successful transactions. Taking time beforehand to manage legal issues keeps those issues from becoming a burden during the sale or purchase process.
Source: Denver Business Journal, “Summit Materials completes $450M buy of Iowa cement plant, terminals,” Molly Armbrister, July 20, 2015