Arcosa, Inc. announced that it has reached a definitive agreement to acquire StonePoint Ultimate Holding LLC and affiliated entities from an affiliate of Sun Capital Partners Inc. for $375 million in cash.
StonePoint is one of the 25 largest aggregates companies in the United States, with approximately 9 million tons of annual production across 20 locations, and more than 40 years of reserve life.
StonePoint operates in three regions: Gulf Coast (Texas, Louisiana, Mississippi); Tennessee/Kentucky; and Pennsylvania/West Virginia. Approximately 80% of StonePoint’s EBITDA is generated from aggregates, while the remaining 20% is earned from asphalt and other services. The acquisition is expected to be accretive to Arcosa’s earnings and margins in 2021.
StonePoint is projected to generate revenues of $117 million and Adjusted EBITDA of $28 million for the 12 months ending March 31, a period that has been impacted by COVID-related construction delays in several key markets.
StonePoint is expected to earn at least $30 million of Adjusted EBITDA in 2021 and return to 2019’s pre-pandemic level of $33 million by 2022, through operating synergies and construction market recovery in several of its geographies.
Additionally, Arcosa expects a net present value of approximately $15 million of tax benefits from the transaction, which the company expects to realize over the next four to five years.
Commenting on the transaction, Antonio Carrillo, Arcosa’s president and chief executive officer, noted, “StonePoint represents an outstanding strategic fit for Arcosa. The transaction aligns with Arcosa’s strategy to expand our Aggregates business in our current footprint and to enter new, attractive geographies. StonePoint has an experienced operating team, an attractive pipeline of organic growth projects and bolt-on acquisitions, and a footprint in fast-growing markets. We look forward to welcoming the StonePoint team to the Arcosa family and building on our combined strengths.”
StonePoint CEO Colin Oerton commented, “Arcosa will be an excellent long-term owner of the StonePoint platform and will be able to further accelerate the growth of the business. We have built an exceptional business and team under Sun Capital and want to thank all of our employees and partners for their work in building a leading U.S. aggregates company.”