Privately held concrete-maker Quikrete is buying rival Summit Materials (SUM) in an all-cash deal valued at $11.50 billion.
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Quikrete said it is buying Summit Materials to capitalize on growing demand for building materials as U.S. government spending on infrastructure ramps up. Quikrete has offered to pay $52.50 a share for Summit Materials, which represents a 29% premium to the closing price of SUM stock on October 23, which is when the two companies entered negotiations.
Atlanta, Georgia-based Quikrete is one of the largest manufacturers of concrete and cement mixes in the U.S. and Canada. Denver, Colorado-based Summit Materials is a provider of construction materials such as cement, ready-mix concrete, and asphalt.
Friendly Takeover
The friendly takeover of Summit Materials is expected to close in the first half of 2025, said the two companies. Once the acquisition is completed, SUM stock will be delisted from the New York Stock Exchange on which it trades.
The stock of Summit Materials is down about 2% on news that it is being acquired by Quikrete. Prior to the acquisition being announced, SUM stock had risen 32% this year. Much of the stock’s rise in recent months was due to takeover rumors swirling around Summit Materials.
Is SUM Stock a Buy?
The stock of Summit Materials has a consensus Strong Buy rating among nine Wall Street analysts. That rating is based on eight Buy and one Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average SUM price target of $51.86 implies 2.13% upside from current levels.
