MLM - Announces Combination with Lhoist NA in Major Limestone Purchase

Research evidence excerpt

MLM - Announces Combination with Lhoist NA in Major Limestone Purchase

strategically positioned in the Sun Belt region. Shares Out (M) 60

Short Interest Ratio/% Of Float 3.6% Deal Values LNA at 15.5x EBITDA After Synergies and Will Be Accretive to EPS in

Dividend/Yield $3.32/0.5% Year 1. The deal is valued at $13.5 billion and will be paid for using $7 billion in cash and

Enterprise Value ($M) $42,466 $6.5 billion in MLM stock based on the volume-weighted average share price over the 15

trading days prior to signing. This values the deal at 17x 2025 Adjusted EBITDA (15.5x after Cash & Equivalents ($M) $67

synergies). Management believes the deal will be accretive to earnings and margins in the Total Debt ($M) $5,323

first year following close. We see 5-10% cash EPS accretion before purchase accounting.

4 Page Document Highlights $85 Million Annual Run-Rate Cost Synergy Opportunity... The company

expects to realize $85 million in annual run-rate cost synergies over the following 2 years

post deal close. The primary source of these synergies is expected to come from rationalizing

Reasons for this report the combined company's distribution platform.

...with Upside from Commercial Opportunities Longer-Term. Not included in the outlined ✓ M&A Announcement

synergy target is the potential for commercial synergies via cross-sell between Lhoist's

existing limestone business and MLM's aggregates business. Longer-term the company

wants to extend its aggregates reach into Lhoist's TX and Southeastern network while doing

the same for limestone in the Carolinas and Denver using MLM's reach. While no timeline

was provided, management stated this would be a longer-term story.

M&A Near-term Will Center Around Aggregates Tuck-ins as the Company Delevers.