Arcosa Acquires Cherry Industries


Arcosa Inc. has reached a definitive agreement to acquire Cherry Industries Inc. and affiliated entities for $298 million. Cherry is a leading producer of natural and recycled aggregates in the Houston market.

For the 12-month period ended Sept. 30, Cherry had revenues of approximately $176 million and EBITDA of approximately $37 million.

Established in 1952, Cherry has developed a unique platform of mines, processing facilities, and services across the Houston area to offer a range of construction materials to customers. It serves diverse infrastructure markets, including highway, industrial, commercial, and residential markets, and also provides concrete demolition services, primarily to secure raw material for recycled aggregates.

Cherry adds 12 Houston locations to Arcosa’s existing 19 active aggregate and specialty materials locations in Texas, building out Arcosa’s footprint in a key Texas market with healthy population growth, major highway investments and positive private demand drivers.

Commenting on the transaction, Antonio Carrillo, Arcosa’s president and CEO, noted, “We are very excited about this acquisition. The transaction is aligned with our strategic plan, accelerating the growth of our high-value Construction Products segment and enhancing our geographic position within Texas. Cherry’s unique platform will provide additional organic and acquisition growth opportunities in Houston and adjacent markets in Texas and the Gulf Coast. Cherry’s unique business model of offering aggregates in combination with recycled aggregates represents an opportunity for Arcosa to replicate in other regions.

“Additionally, the acquisition gives us an immediate leadership position in recycled aggregates, a growing product category due to resource scarcity and ESG benefits. Recycling aggregates decreases landfill use and improves air quality by reducing haul distances and energy consumption. Cherry is the largest recycled aggregates company in the country, and we look forward to building on Cherry’s leadership position.”

Leonard Cherry, president of Cherry, added, “We are very pleased to join Arcosa, which represents an excellent cultural and strategic fit for our employees and our business. We look forward to working with the Construction Products team to grow our natural and recycled aggregates business in Houston and in new markets.”

The company expects to fund the $298 million purchase price with a combination of cash on-hand and borrowings available under its credit facility. The transaction, which has been approved by the company’s board of directors, is subject to customary closing conditions and regulatory provisions under the Hart-Scott-Rodino Act and is expected to close in the first quarter of 2020.

The transaction is expected to be accretive to earnings in 2020, and the company expects to provide guidance for full year 2020 when it releases its fourth quarter and full-year 2019 results in late February 2020.