Summit Materials Inc has acquired Sierra Ready Mix LLC (Sierra), a vertically-integrated aggregates and ready-mix concrete business located in Las Vegas, Nevada. The acquisition provides Summit with premier, well-located assets in an expanding market.
Sierra is a well-established aggregates and ready-mix concrete supplier in the Las Vegas market with an excellent reputation for quality and service. It operates a sand and gravel pit and two ready-mix concrete facilities, and has a well-balanced exposure across all end-use segments. Sierra’s management team is remaining in place to continue to grow and develop the business.
Tom Hill, CEO of Summit, stated, “Sierra’s vertically-integrated operations are a good fit within our Utah-based Kilgore platform and a very sound entry into Las Vegas, the next large market south of the Wasatch Front in Utah. Sierra has a solid position in a sizeable market at an attractive point in the recovery cycle. We are pleased to welcome Sierra’s truly talented team to our rapidly growing company.”
Summit Materials has also released its 1Q16 results and saw its net revenue increased 18.8 per cent to US$208m, compared to US$175.1m in the prior year quarter. The improvement in net revenue was primarily attributable to an increase in volumes and price in aggregates, cement and ready-mixed concrete. Net revenue growth from acquisitions in the West and East segments was US$8.5m compared to the prior year quarter.
Adjusted EBITDA grew to US$8.4m, compared to (US$1.4)m in the prior year quarter, with growth in all operating segments. As a percentage of net revenue, adjusted EBITDA improved to four per cent.
Cement EBITDA increased by US$4.4m to US$1m largely attributable to higher volume and price due to the favourable impact of the Davenport cement plant acquisition and stronger end market demand.
Net revenue from cement grew 202.6 per cent to US$29.7m. Cement volume and price increased 142.7 and 6.7 per cent, respectively, mainly attributable to the acquisition of the Davenport cement plant and overall improved market pricing. Gross margin from cement was 14.3 per cent, compared to 16.1 per cent in the prior year quarter due to higher pricing and production efficiencies.