Sep 21, 2017   SOURCE: BusinessWire

Ash Grove Cement Announces Sale to CRH

Ash Grove Cement Company today announced that it has entered into a definitive merger agreement with CRH plc, under which CRH plc will acquire Ash Grove in a transaction valuing Ash Grove at $3.5 billion on an enterprise value basis. The transaction has been unanimously approved by the board of directors of Ash Grove and is currently expected to close in late 2017 or early 2018, subject to stockholder approval, regulatory approval and other customary conditions.

In announcing the transaction, Charlie Sunderland, chairman of the board, said, “CRH, as our largest customer, has enjoyed a close and highly productive relationship with Ash Grove for many decades. The board of directors believes that CRH will be able to take Ash Grove to its next phase of development after 135 years in operation and over a century under the stewardship of the Sunderland family.”

Under the terms of the merger agreement, Ash Grove stockholders will be entitled to receive cash merger consideration comprised of a pro rata share (based on the number of shares of stock outstanding) of the $3.5 billion enterprise value, minus adjustments for certain non-controlling interests and debt-like items and certain other liabilities, and further adjusted to the extent net working capital and cash on hand at closing vary from certain thresholds. It is expected that approximately 98% of the merger consideration will be paid at the time of closing based on estimated information, and an additional amount, if any, will be paid following completion of a post-closing adjustment process intended to "true-up" the closing estimates to actual amounts as of the closing date. While the final amount of the merger consideration will not be determined until following closing of the transaction due to fluctuation of certain components thereof through closing, the Company currently estimates that the final amount of merger consideration will be in the range of approximately $449 - $454 per share based on Ash Grove’s balance sheet as of June 30, 2017.

In addition, prior to closing of the transaction, the Company intends to pay dividends of excess cash currently anticipated to be in the range of approximately $617 - $706 million in the aggregate, or approximately $82 - $94 per share of outstanding Common Stock and Class B Common Stock, and $86 - $99 per share of outstanding Class D Common Stock.

Following execution of the merger agreement, stockholders representing approximately 63.5% of the outstanding voting stock executed written consents approving the transaction, of which consents representing approximately 31.5% of the outstanding voting stock became effective immediately and consents representing approximately 31.9% of the outstanding voting stock will become effective on Oct. 5, 2017, thereby constituting stockholder approval of the transaction, unless prior to such time certain events occur as described in the merger agreement. Copies of the merger agreement and voting agreements are available from the Company on request, or on the Company’s website.

J.P. Morgan Securities LLC is serving as financial advisor to Ash Grove and Skadden, Arps, Meagher & Flom LLP is serving as legal advisor.

About Ash Grove Cement Company

Ash Grove Cement Company is a leader and pioneer in the cement industry. For 135 years, Ash Grove has provided portland and masonry cements to construct highways, bridges, commercial and industrial complexes, single- and multi-family homes, and other important structures fundamental to America's economic vitality and quality of life. In 2016, Ash Grove shipped 8.2 million tons of cement from eight cement plants located throughout the Midwest, Texas and Western United States. In addition to cement manufacturing facilities, the company operates 52 ready-mixed concrete plants, 25 sand and gravel plants, 20 limestone quarries and nine packaged products plants. Learn more at ashgrove.com and twitter.com/AshGroveCement.

Forward-Looking Statements

This press release includes forward-looking statements related to Ash Grove and the proposed acquisition of Ash Grove pursuant to the merger agreement that are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements regarding the intent, belief or current expectation of Ash Grove. Forward-looking statements include, without limitation, statements regarding the proposed transaction, estimated amounts of merger consideration and anticipated dividends, the occurrence and timing of any closing of the proposed transaction, and other matters. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those currently anticipated due to a number of risks and uncertainties. Risks and uncertainties that could cause the actual results to differ from expectations contemplated by forward-looking statements include: receipt of required approvals; whether or not the transaction is consummated; the timing of any closing; fluctuations in working capital, liability estimates and amounts and other items; Ash Grove's operating performance and financial results prior to closing; the occurrence of unanticipated events; and other factors. All forward-looking statements are based on information currently available to Ash Grove, and Ash Grove assumes no obligation to, and disclaims any intent to, update any such forward-looking statements.