Cornerstone moves into Arizona
Cornerstone Building Alliance, a newly formed holding company co-founded by former Stock Building Supply executives, has added ALC Holding (ALC), Arizona’s largest building materials distributor, to its portfolio. The investment includes Alliance Lumber, Alliance Truss, Arizona Structural Laminators (ASL), Core Materials Distribution and ALC Transportation.
Cornerstone’s leadership team includes president and CEO Steve Short, who served as Stock’s chief operating officer, and Fenton Hord, Stock’s longtime president and CEO. In a prepared statement, Short described ALC, which is based in Phoenix, as Cornerstone’s new “platform” in Arizona.
“Alliance is the leading distributor in a top five housing market,” Short said. “Phoenix and Arizona, which clearly suffered significant downturns, have done a remarkable job of working through their distressed housing problems and are now well positioned to rebound. Our investment positions the business to strategically capitalize on the market recovery both organically and acquisitively. Alliance is a strong, healthy company with a deep and seasoned team. We look forward to a long, mutually beneficial partnership.”
True Carr, president and CEO of ALC Holding, said in a prepared statement: “The combination of Cornerstone and Alliance creates a partnership that is well positioned to capitalize on the future growth of our market. Cornerstone’s significant cash investment in Alliance, along with the additional resources and support this partnership provides, will benefit our customers, employees and shareholders.”
Eagle acquires two Lafarge plants
Eagle Materials, a major cement and gypsum supplier, agreed to buy cement plants and a variety of related businesses from Lafarge North America.
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, the company said.
Under the deal, Eagle Materials will acquire Lafarge’s Sugar Creek, Mo., and Tulsa, Okla., cement plants. It will also take over six distribution terminals, two aggregate 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 acquisition will increase Eagle’s U.S. cement capacity by roughly 60%, the company said.
The transaction is expected to close in November or December 2012, pending regulatory approvals.
“Our stated strategy has been to grow the cement and aggregates side of our business,” said Steven Rowley, Eagle Materials president and CEO. “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.”
Eagle had net sales of $495 million in 2012, 31% of which was in the cement business.
Talks may reopen on softwood lumber agreement
The National Association of Home Builders (NAHB) is urging federal officials not to use the U.S.-Canadian lumber agreement as a bargaining chip during the Trans-Pacific Partnership Trade Agreement (TPP) negotiations.
The United States is currently in talks with Canada regarding its participation in a TPP trade pact with several other nations. The softwood lumber accord between the United States and Canada, which expires in 2015, should not be renegotiated as part of these discussions, according to the NAHB.
“It would be highly inappropriate for discussions on the U.S.-Canada softwood lumber agreement to include any nations,” the NAHB said in a prepared statement.
Jerry Howard, the trade group’s CEO, testified before the office of the U.S. Trade Representative in Washington, D.C., on Sept. 24.
"Reopening the U.S.-Canada softwood lumber agreement would jeopardize the successful negotiation of a TPP trade agreement, bogging down the talks with a century-old dispute between the United States and Canada on softwood lumber that has yet to achieve a final resolution," said Howard. "Softwood lumber issues are too important to get lost in the context of a multinational trade negotiation and must be addressed by the U.S. and Canada in a bilateral forum."
With the U.S. housing sector now showing signs of revival in scores of markets across the nation, Howard said the presence of artificial trade barriers on softwood lumber and other products and materials that go into home building can have significant economic consequences. He also noted that lumber is the most important and also the most costly material used in home building.