NEW YORK – Quikrete, the building materials provider, has approached rival Summit Materials (NYSE: SUM), which has a market value of more than $7 billion, with an acquisition offer, people familiar with the matter said on Thursday.
Quikrete, which is privately held, is working with its advisers on the bid for Summit Materials and the talks are at an early stage, the sources said, requesting anonymity as the discussions are confidential.
Summit Materials trades at a discount to peers like Vulcan Materials (NYSE: VMC) and Martin Marietta Materials (NYSE: MLM), making it an attractive acquisition target.
On Thursday, Summit Materials (NYSE: SUM) said it had received a non-binding acquisition proposal and was in initial discussions, without disclosing any further details.
The board will carefully evaluate the offer, it said in the statement, adding there was no assurance of a definitive agreement.
Quikrete did not immediately respond to a request for comment.
The talks come as increased U.S. government spending on infrastructure has boosted prospects for suppliers of building products.
Earlier this year, Miter Brands, which is backed by Koch Industries, agreed to buy PGT Innovations, a U.S. maker of vinyl and aluminum doors and windows, for $3.1 billion, including debt.
Founded in 1940, Atlanta, Georgia-based Quikrete is one of the biggest manufacturers of packaged concrete and cement mixes in North America.
Summit Materials (NYSE: SUM) is a provider of construction materials such as cement, ready-mix concrete, and asphalt and also offers services such as construction and paving. Last year, Summit struck a $3.2 billion deal to merge with the U.S. business of Colombia-based building materials company Cementos Argos.
Both Quikrete and Summit operate in the U.S. and Canada.
Summit Materials shares closed up more than 6% on Thursday after Bloomberg reported on the talks.
(Source: ReutersReuters)
