Eagle Materials To Acquire Two Cement Plants

The company will purchase Lafarge’s Sugar Creek, Missouri and Tulsa, Oklahoma cement plants, as well as six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business. Eagle will also supply certain Lafarge operations with cement for four to five years, and an agreement with a Lafarge affiliate to supply low-cost alternative fuels to the acquired operations.

Eagle Materials Inc. Announces a Definitive Agreement to Acquire Two Lafarge Cement Plants and Related Assets

Dallas, TX - Eagle Materials Inc. announced today that the company has entered into a definitive agreement with Lafarge North America to purchase Lafarge’s Sugar Creek, Missouri and Tulsa, Oklahoma cement plants, as well as related assets, which include six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business. Eagle will also enter into a transition sales agreement to supply certain Lafarge operations with cement for four to five years, and an agreement with a Lafarge affiliate to supply low-cost alternative fuels to the acquired operations.

The purchase price is $446 million, subject to customary post-closing adjustments. Trailing 12-month revenues through June 30, 2012 for the cement plants and related assets were $178 million. The acquisition will increase Eagle’s US cement capacity by roughly 60%. The transaction is expected to close in November or December 2012, pending regulatory approvals.

Steven Rowley, Eagle Materials Inc. President and Chief Executive Officer, said the agreement represents a major milestone event for the Company. “Our stated strategy has been to grow the cement and aggregates side of our business. Our first priority has been to acquire cement plants that connect but do not overlap with the market reach of our existing plants. These two high-quality Lafarge cement plants are a compelling fit with our objectives -- and the transaction meets our stringent criteria for new investment. These assets will allow us to participate more fully in the US construction industry recovery; additionally this transaction further positions the company near energy growth markets where there is growing demand for our specialty oil well cement along with our newly-offered high-quality northern white frac sand. These new cement, concrete and aggregates assets will immediately contribute earnings and cash flow for our stockholders; moreover they will provide significant near-term opportunities for synergies and earnings growth.”

Financial Terms

The purchase price of $446 million is expected to be funded primarily by borrowings under Eagle’s existing bank credit facility, with the remainder funded by the proceeds of an equity offering.

About Eagle Materials Inc.

Eagle Materials (“Eagle”) is a diversified producer of basic building materials used in residential, industrial, commercial and infrastructure construction and in oil and gas production. We operate in four business segments, through which we conduct the following activities:

  • Cement: We mine limestone and manufacture, produce, distribute and sell Portland cement, which is a basic construction material that is the essential binding ingredient in concrete, and specialty cement products which are used in the casing of oil and gas wells and other applications.
  • Gypsum wallboard: We mine gypsum and manufacture and sell gypsum wallboard, which is used to finish the interior walls and ceilings in residential, commercial and industrial structures.
  • Recycled paperboard: We manufacture and sell recycled paperboard, which is used to produce gypsum wallboard (including our own gypsum wallboard) and other industrial and consumer paperboard products.
  • Concrete and aggregates: We distribute and sell ready-mix concrete, which is a versatile, low-cost material widely used in construction, and mine and sell aggregates, including crushed stone, sand and gravel.

Our principal lines of business are our cement and gypsum wallboard. Our cement business is supported by our concrete and aggregates business, and our gypsum wallboard business is supported by our recycled paperboard business.

We currently operate four cement plants (one of which is held by a joint venture in which we have a 50% interest), five gypsum wallboard plants (one of which is temporarily idled), one recycled paperboard plant, nine ready-mix concrete plants and two aggregates facilities. As discussed above, on September 24, 2012, we signed a definitive agreement to acquire two cement plants, six distribution terminals, eight ready-mix plants, two aggregates quarries and certain related assets and operations from Lafarge North America.

Our operations are geographically diversified within the United States. The principal markets for our cement products are Texas, northern Illinois (including Chicago), the Rocky Mountains, northern Nevada and northern California. The cement plants and other facilities we plan to acquire from Lafarge North America serve markets in the south central United States.

Our gypsum wallboard operations are more national in scope, but our sales of gypsum wallboard are concentrated in the markets closest to our production facilities. Our paperboard operations are national in scope. Our concrete and aggregates businesses are local in nature and serve the areas immediately surrounding Austin, Texas and areas north of Sacramento, California.

In fiscal year 2012, our net sales were $495 million, of which 31% was generated by our cement business, 44% by our gypsum wallboard business, 16% by our recycled paperboard business and 9% by our concrete and aggregates business. During fiscal year 2012, we sold 2.7 million short tons of cement, 1,633 million square feet of gypsum wallboard, 230,000 tons of recycled paperboard, 2.2 million tons of aggregates and 507,000 cubic yards of concrete.

We are a Delaware corporation with our headquarters located at 3811 Turtle Creek Blvd., Suite 1100, Dallas, Texas 75219. Our telephone number is (214) 432-2000 and our website is www.eaglematerials.com.

About Lafarge North America

Lafarge North America Inc. ("Lafarge ") has approximately 270 industrial and distribution sites and 4,200 employees in 41 States in its US cement, aggregate, concrete and gypsum businesses.

Lafarge S.A., together with its subsidiaries (the "Lafarge Group" or the "Group"), is the world leader in building materials, with top-ranking positions in all of its businesses: Cement, Aggregates and Concrete. With 68,000 employees in 64 countries, the Group posted sales of 15.3 billion Euros in 2011. Lafarge North America Inc. and its subsidiaries, including Lafarge Canada Inc., are Lafarge Group companies, and together constitute the largest diversified supplier of construction materials in the United States and Canada.

For more information about Lafarge North America, go to www.lafarge-na.com

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