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 Rinker Does Another Deal
January 30 2007 - Australasian Investment Review – (AIR) |
More 'business as usual' deals in the US for Rinker Group as it continues to ignore the $US 13 a share, $US 11.7 billion bid from Cemex of Mexico.Rinker said yesterday that its US arm, Rinker Materials, had snapped up two new assets in Utah and Tennessee to add to a deal in Oregon revealed last week and a fourth in Tennessee announced last November. Rinker said that in the latest deals it had bought a quarry, four concrete plants and other aggregates assets from JR Sons Ready Mix in Utah which will give it a bit more of a geographic spread from the concentration on Florida, New Mexico/ Nevada. The company did not say how much it paid for the assets but analysts say the deals look like they would be priced around the $US 20 millionto $US 25 million mark: there is a condition in the Cemex offer that allows the bid to be withdrawn if RIN makes acquisitions worth $US 200 million.The company said the new assets would allow Rinker Materials to enter a new market in Utah's St George area, one of the state's fast growing regions.
In Tennessee, Rinker has acquired the Union Concrete Company, which runs three concrete plants in Knoxville which will be added to the recent purchases of a limestone quarry producer in Tennessee and three quarries and a block plant in south-east Kentucky.Rinker chief executive, David Clarke, said the latest purchase would enhance the company's downstream delivery network."Both acquisitions are expected to earn above their cost of capital within the first year," Mr Clarke said in a statement yesterday.Rinker said these two deals, along with the Greenback, N&H, and Walling Sand & Gravel in Oregon (announced last week); together add almost four million tons (3.6 million tonnes) of aggregate and 390,000 cubic yards (300,000 cubic metres) of concrete to Rinker Materials’ annual production output.Rinker says it has invested around US$2 billion in more than 50 acquisitions since 1998, together with around US$1 billion in the development of new quarries and operating plants and expansion of the base business. .Around 80 per cent of group revenue comes from the US and that's why Cemex has its takeover in place. The $US 13 a share was worth around $A 16.80 yesterday after the Australian dollar eased to around 77.30 USc. Rinker shares traded a touch firmer at $A18.29.The company's independent exports report values the company around $A 20.58 to $A 23.04 a share.Rinker is due to release4th quarter production figures later this week. Copyright Australasian Investment Review.
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