LUMBERYARDS

Eagle acquires two Lafarge plants

BY Ken Clark

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.

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Talks may reopen on softwood lumber agreement

BY Brae Canlen

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.

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Pro dealers to hone business skills

BY Ken Clark

The ProDealer Industry Summit, sponsored jointly by the National Lumber and Building Material Dealers Association (NLBMDA) and Home Channel News, will explore macroeconomic forces, as well as the everyday running of an LBM business.

One of those business-improvement presentations is “The One Minute Negotiator,” which isn’t geared toward consummating a deal in less than 60 seconds, stressed George Lucas, who will open the general session on Oct. 25. The author, trainer and consultant is focused on a one-minute strategy toward sizing up the other side of a negotiation and choosing the correct approach. 

“Most people are fearful of negotiations,” Lucas said. “They think it’s going to damage relationships.”  But negotiating skills are more important than ever in the current LBM market, he added. 

“Margins are thinner than they’ve ever been, and it’s extremely difficult to win new business based on price alone,” said Lucas, whose client list includes Orgill and Rust-Oleum. “Any attempt that’s price-based is going to get the incumbent to cut their price.”

Knowing the other side’s negotiating style — i.e., collaborative, competitive, accommodating, conflict-avoiding — is always helpful when entering into a deal-making session. But Lucas can offer pointers when recognizance is in short supply. “I try to help people get their mind around a negotiation in a short amount of time,” Lucas said.

The ProDealer Industry Summit will be held Oct. 24 to 26 at the Westin Savannah in Savannah, Ga. Jointly sponsored by Home Channel News and the NLBMDA, the three-day conference will include a dinner banquet, networking events, a golf tournament and educational sessions. For more information, visit prodealer.com.

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