Arcosa (ACA) Completes ACG Materials Acquisition; Initiates Dividend, Share Buyback

Arcosa, Inc. (NYSE: ACA) completed the acquisition of ACG Materials, and that its Board of Directors has approved the initiation of a cash dividend and the establishment of a share repurchase authorization.

On December 5th, Arcosa completed the previously announced acquisition of ACG, a producer of specialty materials and aggregates. The purchase price of approximately $315 million was funded with a combination of cash on-hand and a $180 million borrowing under Arcosa’s $400 million five-year credit facility. Based on ACG’s estimated revenues of $152 million and adjusted EBITDA of $32 million for the trailing twelve month period ended August 31, 2018, this combination is expected to increase the current annualized revenues of Arcosa’s Construction Products segment by approximately 50%, to $450 million, and be slightly accretive to EPS in 2019.

The Company plans to update its fiscal 2019 revenue and EBITDA guidance for the acquisition once it has additional clarity on purchase price accounting.

Today, the Board of Directors declared a quarterly cash dividend of $0.05 per share on the Company’s $0.01 par value common stock, payable on January 31, 2019, to stockholders of record as of January 15, 2019.

In addition to the dividend payment, the Board approved a share repurchase authorization of up to $50 million through December 31, 2020. Shares may be repurchased in the open market or through private transactions at times and amounts determined by the Company based on its evaluation of market conditions and other factors.

Antonio Carrillo, President and Chief Executive Officer, commented, “We are excited to announce the completion of the ACG Materials acquisition while also putting in place the additional key elements of our growth-oriented capital allocation strategy. Arcosa’s strong liquidity position, together with our considerable free cash flow generation, provides us the flexibility to invest in organic projects and bolt-on acquisitions at ACG Materials and our other businesses, while also enhancing shareholder returns through dividends and share repurchases. We remain focused on improving return on invested capital to create shareholder value.”

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