Vulcan Materials Company VMC, the largest producer of construction aggregates in the United States, has announced plans to acquire Superior Ready Mix Concrete, L.P. This acquisition is a strategic move to solidify Vulcan’s presence in California, the most populous state and the second-largest aggregates market in the country. By integrating Superior’s six aggregates operations, two asphalt plants, and 13 ready-mixed concrete locations, Vulcan aims to enhance its service capabilities in the key Southern California region.
The acquisition aligns with Vulcan’s aggregates-led growth strategy, which focuses on expanding its reach in high-demand markets while maintaining profitability. With more than 50 years of quality reserves added to its California portfolio, this deal not only ensures supply stability but also positions Vulcan to capitalize on the state’s robust construction activities.
Shares of this leading supplier of construction aggregates gained 1.2% during the trading session yesterday following the news.
Why California Matters for Vulcan?
California’s construction landscape is pivotal for Vulcan due to its size and infrastructure needs. The state’s growing population demands extensive residential, commercial, and public works development, making aggregates a critical component. The addition of Superior’s assets enhances Vulcan’s ability to meet this demand efficiently, reinforcing its leadership in the market.
Moreover, Superior’s long-standing reputation for quality aligns seamlessly with Vulcan’s operational ethos. The combination is expected to strengthen Vulcan’s competitive edge, particularly in customer service and supply chain reliability.
A Strategic Growth Plan in Motion
This acquisition continues Vulcan’s trend of strategic investments in 2024. The company has already spent $206.4 million on four bolt-on acquisitions across key markets, including California, North Carolina, Alabama, and Texas. Each deal supports Vulcan’s strategy of expanding its geographic footprint and operational capabilities.
The company’s financial flexibility has been instrumental in pursuing these growth opportunities. By maintaining a balance between acquisitions and shareholder returns, Vulcan demonstrates a disciplined approach to capital allocation. For 2024, the company’s capital expenditure forecast remains between $625 million and $650 million.
Vulcan CEO’s Vision for Integration
Tom Hill, Vulcan’s chairman and CEO, expressed confidence in the acquisition’s value proposition. “Superior’s commitment to excellence perfectly complements our culture of continuous improvement. This transaction not only broadens our operational capabilities but also creates avenues for long-term profitability and customer satisfaction,” Hill noted.
Hill emphasized that the “Vulcan Way” disciplines—focusing on operational efficiency and strategic market penetration—will guide the successful integration of Superior’s assets.
Looking Ahead
The acquisition of Superior is expected to close by the end of 2024, pending customary regulatory approvals. As Vulcan continues to strengthen its foothold in critical markets, this deal underscores its commitment to sustainable growth and delivering value to shareholders and customers. With the California market poised for significant development, the integration of Superior’s operations marks a significant step in Vulcan’s journey to remain the industry leader.
VMC’s Share Price Performance
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Vulcan shares have gained 23.2% year to date (YTD) compared with the Zacks Building Products - Concrete and Aggregates industry’s 14.9% growth. The company is benefiting from solid public infrastructure demand trends, reflecting increased contract flow, and efficient execution of its core enhancing and reach-expanding strategy. Also, it showcased resilience through accretive buyouts, favorable pricing and cost management. The Zacks Consensus Estimate for 2025 earnings per share calls for 23.2% year-over-year growth.
VMC’s Zacks Rank & Key Picks
Currently, Vulcan carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector.
Sterling Infrastructure, Inc. STRL presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter earnings surprise of 21.5%, on average. Shares of STRL have risen 114.5% YTD. The Zacks Consensus Estimate for STRL’s 2025 sales and earnings per share (EPS) implies an increase of 7.3% and 8.1%, respectively, from the prior-year levels.
Louisiana-Pacific Corporation LPX currently flaunts a Zacks Rank of 1. LPX delivered a trailing four-quarter earnings surprise of 30.7%, on average. The stock has gained 65.4% YTD.
The Zacks Consensus Estimate for LPX’s 2025 sales indicates an increase of 4.3% but a decline of 7.3% in EPS from a year ago.
MasTec, Inc. MTZ presently sports a Zacks Rank of 1. MTZ delivered a trailing four-quarter earnings surprise of 40.2%, on average. The stock has gained 79.8% YTD.
The Zacks Consensus Estimate for MTZ’s 2025 sales and EPS indicates an increase of 8.6% and 45.5%, respectively, from a year ago.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
