Quikrete to take Summit Materials private in deal valued at $11.5 billion

By Aatreyee Dasgupta and Kannaki Deka

(Reuters) -Summit Materials said on Monday rival Quikrete would acquire the company in a deal valued at $11.5 billion, in a move to capitalize on higher demand for building materials.

The sector's deal-making activity has been heating up due to rising U.S. government infrastructure spending and anticipation of growing material demand.

Summit had said in October it expected public infrastructure to remain a source of steady activity in 2025.

The company's shares, however, have been trading at a discount to its industry peers such as Vulcan Materials and Martin Marietta Materials.

Privately held Quikrete approached Summit with an acquisition offer in October, Reuters had reported.

The concrete maker's $52.50 per share offer represents an about 29.2% premium to Summit's closing price a day before Reuters reported the talks.

Quikrete's offer equates to an about $9.2 billion deal on an equity basis, according to a Reuters calculation.

Atlanta, Georgia-based Quikrete is one of the largest manufacturers of packaged concrete and cement mixes in North America.

Denver, Colorado-based Summit is a provider of construction materials such as cement, ready-mix concrete and asphalt.

Morgan Stanley and Evercore acted as financial advisors to Summit, while Davis Polk & Wardwell LLP served as its legal advisor.

Summit said in a regulatory filing on Monday that Quikrete had $9.2 billion of debt financing in place.

"Given several of Summit's businesses, namely aggregates... Quikrete could look to shop some of its assets," analysts said in a Jefferies note.

The analysts added Quikrete seemed most interested in Summit's cement and ready-mix operations.

The transaction is expected to close in the first half of 2025.

Shares of Summit fell about 1.7% in early market hours.

(Reporting by Aatreyee Dasgupta, Nathan Gomes and Kannaki Deka in Bengaluru; Editing by Savio D'Souza, Shreya Biswas and Tasim Zahid)