Eagle Materials has entered into an agreement with Kosmos Cement, a joint venture between CEMEX S.A.B. de C.V. and Buzzi Unicem, to purchase Kosmos’ Louisville, KY cement plant and related assets, which include seven distribution terminals and substantial raw material reserves.
The plant has the capacity to produce nearly 1.7 million tons of cement annually. The purchase price is $665 million, subject to customary post-closing adjustments.
Eagle intends to finance the acquisition through a combination of cash on hand and borrowings under a new term loan. Eagle remains focused on maintaining a prudent capital structure and a strong financial position following the close and financing of the transaction.
According to a related 8-K filing, in connection with the purchase, the company has entered into an engagement letter and commitment letter with JPMorgan Chase Bank, and Goldman Sachs Bank, USA to arrange a $665 million syndicated term loan facility, with a committed 364-day bridge facility of an equal amount available on a “certain funds” basis should the syndication of the term loan facility be unsuccessful.
In addition, the commitment parties have agreed to arrange, on a best efforts basis, an amendment to the company’s existing revolving credit facility, with a committed backstop facility available on a “certain funds” basis should the solicitation of the amendments be unsuccessful, in either case to allow for the consummation of the Acquisition on a “certain funds” basis and to make certain other changes.
“At Eagle we have been disciplined in the strategic growth of our integrated network of cement plants in the US heartland, and the Kosmos facilities are a natural fit. The Kosmos facilities are high-quality, low-cost assets that align with our long-term strategic growth plans and meet our criteria for new investment. These assets will also enable us to participate more significantly in US construction and infrastructure market growth,” said Michael Haack, Eagle Materials president and CEO.
Goldman, Sachs is acting as exclusive financial advisor to Eagle on this transaction.
Dallas-based Eagle Materials manufactures and distributes cement, gypsum wallboard, recycled paperboard, concrete, sand and aggregates, from more than 75 facilities across the U.S.