Arcosa has acquired Arizona-based Southwest Rock Products for $150 million in a bid to reduce its cyclicality and enter new geographies.
ArcosaCEO Antonio Carrillo says: “Southwest Rockhas an experienced operating team, a strong footprint in the high growth Phoenix market area, and a pipeline of actionable bolt-on opportunities.
“We have made considerable progress advancing our portfolio shift into higher margin and more stable Construction Products. Since our spin-off, we have invested approximately $1.3 billion in construction materials acquisitions, which has expanded our Construction Products businesses to now represent more than 50% of our Adjusted EBITDA.”
The move coincides with the release of Arcosa’s results for the quarter ended 30 June 2021, which revealed revenues of $515.1 million, up 3%. Highlights also include an adjusted net income of $29.1 million.
“Our second quarter results reflect the resilience of our portfolio of infrastructure businesses as we executed successfully and kept pace with last year’s record results despite some headwinds,” Carrillo continues.
“Construction activity was strong overall, with some offset from abnormally wet weather during the quarter, especially in our largest markets within Texas and along the Gulf Coast. The integration of StonePoint is progressing smoothly and performance is tracking well against our expectations, adjusting for the wet weather.
“Order activity for our utility and traffic structures businesses was very healthy during the quarter as growth drivers remain intact. We are also encouraged by improving fundamentals in the North American railcar market, with orders in our steel components business outpacing shipments during the quarter.
“We continue to confront high steel prices. On a positive note, we have been able to proactively raise prices across most of our steel manufacturing businesses to help mitigate the impact on margins. While long-term fundamentals remain strong for our barge business, high steel prices continued to depress order activity. As planned, we will idle our Louisiana plant in the third quarter, and we have taken additional steps to strategically extend our backlog into 2022 to allow time for a market recovery.”
