CMC TO ACQUIRE FOLEY PRODUCTS COMPANY

Core Viewpoint - Commercial Metals Company (CMC) has announced the acquisition of Foley Products Company for $1.84 billion, which is expected to enhance CMC's precast concrete platform and financial profile, providing immediate scale and synergy opportunities [1][2][4]. Strategic and Financial Rationale - The acquisition will position CMC as the third largest player in the U.S. precast market, enhancing its presence in the Mid-Atlantic and Southeast regions [4][5]. - Foley Products is recognized for its industry-leading EBITDA margins and cash flow generation capabilities, which will be integrated into CMC's portfolio [4][5]. - The deal is expected to be immediately accretive to earnings per share and free cash flow per share, with anticipated annual run-rate synergies of $25 million to $30 million by year three [1][4][12]. Market Position and Growth Potential - CMC will operate 35 facilities across 14 states post-acquisition, capturing a 17% share of the growing U.S. concrete market, which has revenues of approximately $30 billion [5][7]. - The acquisition of Foley, along with the pending acquisition of Concrete Pipe & Precast (CP&P), is expected to create a new growth platform and enhance CMC's ability to address construction industry challenges [2][5]. Financial Profile Transformation - The combined precast platform is projected to increase CMC's core EBITDA margin by 210 basis points on a pro forma basis, significantly improving free cash flow [12]. - Following the acquisitions, approximately 32% of CMC's total pro forma segment adjusted EBITDA will come from the Emerging Businesses Group and the precast platform, up from 15% in FY 2025 [12]. Synergy Opportunities - CMC anticipates operational synergies of $25 million to $30 million between Foley and CP&P, with additional commercial synergies expected through cross-selling and enhanced product capabilities [5][12]. - The integration of best practices from both Foley and CP&P is expected to drive meaningful value creation and operational efficiencies [5][12].