Cemex, Inc.announced today that it is in negotiations with Ready Mix USA to expand the scope of their ready-mix joint venture formed in July 2005. The completion of the transaction is subject to the signing of a definitive agreement and obtaining the required regulatory approvals.
Cemex intends to contribute assets valued at approximately $150 million to the joint venture and intends to sell additional assets to the joint venture for approximately $227 million in cash. As part of the transaction, Ready Mix USA intends to make a $150 million cash contribution to the joint venture. Ready Mix USA will manage all the newly acquired assets. Following the transaction, the joint venture will continue to be owned 50.01% by Ready Mix USA and 49.99% by Cemex.
The assets that would be contributed and sold by Cemex would include: 11 concrete plants, 12 limestone quarries, four concrete maintenance facilities, two aggregate distribution facilities and two administrative offices in Tennessee; three granite quarries, one aggregate distribution facility in Georgia; and, one limestone quarry and one concrete plant in Virginia. All these assets were acquired by Cemex through its acquisition of Rinker Group Limited earlier this year.
CEMEX intends to use the proceeds of the sale of these assets to reduce debt. The 2006 EBITDA for the operations involved was approximately $47 million.
“We continue to be pleased with our joint venture with Ready Mix USA. We believe that this transaction will further enhance its ability to serve our customers even better than we do today, while strengthening our already successful relationship with Ready Mix USA,” said Gilberto Perez, President of Cemex, Inc.