Arcosa, Inc. · NYSE:ACA
Arcosa — Merger or Acquisition (December 2019)
14 slides from Arcosa's merger presentation, Dec 12, 2019
Slide 1: Overview of Cherry Acquisition
Overview of Cherry Acquisition December 12, 2019
Slide 2: How to Find Us
How to Find Us OUR WEBSITE NYSE TICKER www.arcosa.com ACA HEADQUARTERS INVESTOR CONTACT Arcosa, Inc. InvestorResources@arcosa.com 500 North Akard Street, Suite 400 Dallas, Tx 75201 2 / Moving Infrastructure Forward
Slide 3: Forward-Looking Statements
Forward-Looking Statements Some statements in this presentation, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa, Inc.’s (“Arcosa” or the “Company”) estimat
Slide 4: Executive Summary
Executive Summary ▪ On December 12th, we announced an agreement to acquire the Cherry Companies (“Cherry”) for $298M ▪ Cherry is a leading provider of natural and recycled aggregates in greater Houston, with 12 locations in the area. Cherry had trailing 12 month revenues of $176M and EBITDA of ~$37M
Slide 5: Cherry Companies Highlights
Cherry Companies Highlights $176M Natural Aggregates Recycled Aggregates Revenue $37M ▪ Mining and processing of sand, including ▪ Crushing and recycling concrete to re-use EBITDA processing into stabilized materials by as aggregates mixing with cement 6M+ Strategic Rationale Tons Produced ▪ Expands
Slide 6: Broad Construction Materials Product Offering
Broad Construction Materials Product Offering Cherry produces and sells a range of construction materials used in infrastructure Materials1: ~95% of EBITDA Natural Aggregates/Stabilized Sand Recycled Aggregate Products Demolition Services: ~5% of EBITDA ▪ Road/bridge, commercial/ industrial, and oth
Slide 7: Unique Platform with Sustainable Competitive Advantages
Unique Platform with Sustainable Competitive Advantages Cherry’s competitive advantages have helped it build a market-leading platform that generates attractive financial returns Cherry’s Competitive Advantages Attractive Financial Returns Network of Access to critical raw products, both ▪ Demonstra
Slide 8: Attractive Houston Market
Attractive Houston Market Transaction expands Arcosa’s aggregates business into greater Houston market, a key gap in our current Texas network Houston’s end market fundamentals suggest …and Cherry’s continued growth… platform fills in a key gap in our current Population ▪ Annual 2.6% population grow
Slide 9: Recycled Aggregates: A Platform for Growth
Recycled Aggregates: A Platform for Growth Acquisition builds leadership position in recycled aggregates, a growing product category due to resource scarcity and ESG benefits Demand drivers Description ▪ Virgin natural aggregates are becoming more scarce near established metropolitan Resource areas,
Slide 10: Accelerates Arcosa's portfolio shift into Construction Products
Accelerates Arcosa’s portfolio shift into Construction Products The acquisition is consistent with our strategy to grow Construction Products and reduce the cyclicality of our overall portfolio Arcosa Construction Materials Platform Infrastructure-related End Markets Aggregates Specialty Materials P
Slide 11: Transaction and Financing Overview
Transaction and Financing Overview • Purchase price of ~$298M, pending customary working capital or post-closing adjustments • At of the end of Q3-19, we reported $389M of liquidity and a net cash position Financing • We expect to fund the transaction with a combination of cash on-hand and advances
Slide 12: Investment Highlights
Investment Highlights Cherry’s unique platform of Grows Arcosa’s Recycled Aggregates stabilized sand, recycled construction materials positioned to grow as a aggregates, and services presence in attractive category due to resource creates sustainable Houston market scarcity and ESG benefits competit
Slide 13: Appendix
Appendix 13 / Moving Infrastructure Forward
Slide 14: EBITDA Reconciliation
EBITDA Reconciliation $ Millions (For the Trailing Twelve Months Ended September 30, 2019) Net income $28.5 Add: Interest expense 0.1 Provision for income taxes 1.2 Depreciation & amortization expense 7.1 EBITDA $36.9 “EBITDA” is defined as Cherry’s net income plus interest expense, income taxes, de