Commercial Metals to acquire Foley Products for $1.84B

Commercial Metals (CMC) announced it has entered into a definitive agreement to acquire Foley Products, a regional supplier of precast concrete solutions in the United States, for a cash purchase price of $1.84B, subject to customary purchase price adjustments. The purchase price represents a multiple of 10.3x Foley’s forecasted 2025 EBITDA. When anticipated cash tax benefits are included, the effective multiple is reduced to approximately 9.2x. The transaction is expected to be immediately accretive to earnings per share and free cash flow per share, and by year three annual run-rate synergies are expected in a range of $25M-$30M of EBITDA. CMC has identified approximately $25M-$30M of operational annual run-rate synergies between Foley and CP&P by year three, with more expected to be identified in the future. Following the completion of both acquisitions, net debt to adjusted EBITDA is forecasted to be approximately 2.7x. CMC will prioritize debt repayment and utilize the expected enhanced cash flow provided by its precast platform to reduce net leverage to its target level of below 2.0x within 18 months. The transaction has been approved by the boards of directors of Commercial Metals Company and Foley Products. The closing of the transaction is expected to occur in a timely manner following customary regulatory review and is subject to customary closing conditions. The company has obtained a commitment for financing to complete the transaction.