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Eagle Materials makes more spin-off moves

Building products manufacturer names two CEOs for separated heavy and light materials businesses.

BY HBSDealer Staff

Eagle Materials Inc. has revealed more information about its plan to split the company in half.

The Dallas, Texas-based company’s board of directors approved a plan in 2019 to separate its heavy and light materials businesses into independent, publicly-traded companies through a tax-free spin-off to Eagle shareholders. Eagle has targeted this summer for the completion of the separation.

Following the split, the separate companies each expect to be listed and traded on the New York Stock Exchange.

In the latest move, the company’s board of directors has chosen its lead executives for the two companies.

The company’s heavy materials business will be spun-off and will be named Eagle Materials Inc. Mike Nicolais, current Eagle Materials chairman, will become chairman of the board of the spun-off company. Eagle Materials current president and CEO, Michael Haack, will become president and CEO of the heavy materials business.

The light materials business will be named American Gypsum Company. Dave Powers, former Eagle Materials CEO and current Eagle Materials board member, will become the chairman of American Gypsum. Craig Kesler, current CFO of Eagle Materials, will become the president and CEO of American Gypsum.

“It is a board imperative that both companies be launched this year with the experienced leadership required to assure continued success and to provide continuity on the factors that have made these businesses the benchmark operating performers in their respective industries,” said Mike Nicolais, Eagle chairman.

Powers led the American Gypsum organization for 11 years before becoming the president and CEO of Eagle Materials. Kesler is a 16-year Eagle veteran and has served as CFO for the past 11 years.

“This degree of continuity and directly-relevant experience gives us every confidence that the transition to creating two separate, top-performing companies will be seamless and that both companies will continue to generate value for all shareholders,” Nicolais noted.

After the separation, Eagle said that the company’s existing heavy materials business, a U.S.-heartland cement-plant system with complementary concrete, aggregates and sand operations, is expected to continue to produce strong margins and significant cash flows.

Eagle will remain focused on low-cost production, operate in key U.S. geographies with favorable market dynamics and drive profitable growth through both strategic acquisitions and the organic development of its asset network.

The light materials business is expected to continue to be a benchmark producer of gypsum wallboard and recycled paperboard, the company said. The business includes an integrated paperboard mill that utilizes advanced technologies to supply the wallboard plants with high-performing, low-cost facing paper.

The current, single incarnation of Eagle Materials manufactures and distributes cement, gypsum wallboard, recycled paperboard, concrete, aggregates and sand from more than 75 facilities across the country.

 

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