Summit Materials, a major US vertically integrated construction materials company, has sold its Kentucky-based Hinkle Contracting business to an affiliate of CRH Americas Materials.
Hinkle Contracting (Hinkle) owns and operates asphalt plants, rock quarries and paving operations. Hinkle also owns Kentucky Hauling, Bourbon Limestone, and Ohio Valley Asphalt. Additionally, Hinkle is a joint venture partner in Nally & Gibson and Hamilton Hinkle.
“Hinkle was among Summit’s early acquisitions and an integral part of the Company’s foundational growth,” said Summit Materials CEO Anne Noonan. “Moving forward, we are pleased to have reached a mutually beneficial transaction with CRH Americas for Hinkle at an attractive valuation of over 10x 2021 Adjusted EBITDA, delivering value to our stakeholders. We are committed to working with CRH Americas on a smooth transition for the Hinkle employees and customers.”
The Hinkle divestiture supports Summit Materials’ Elevate Summit Strategy, which includes a disciplined and ongoing portfolio optimisation designed to drive Summit forward with its strategic priority of being a materials-led company with selective participation in high return downstream businesses. The Hinkle sale represents Summit’s tenth business divestiture since the Elevate Summit Strategy began in March 2021.
“The implementation of our Elevate Summit long term strategy continues to drive improved execution, and financial performance as evidenced by record reported 2021 net revenue, net income, adjusted cash gross profit, and adjusted EBITDA,” continued Noonan. “Our Market Leadership focus, which combines organic growth and portfolio optimisation with a stronger balance sheet position, will provide Summit with the financial flexibility to support future growth through continued greenfield investments and the pursuit of strategic acquisitions to further enhance shareholder value.”
Summit Materials’ first-quarter 2022 saw company revenue down 1.5% to US$392mn, largely due to divestitures finalised in 2021, partially offset by increases in average sale prices. The firm’s operating loss increased by $9.2mn (+36.9%) to $34.3mn.
By business segment, aggregates revenues were up $6mn to $123.4mn; cement revenues were up by 13.7% to $46.2mn; product revenues were down to $189.7mn from $198.7mn in Q1 2021.
