MEXICO CITY, Feb 26 (Reuters) – Mexico’s Cemex will buy U.S. stucco manufacturer Omega Products International, the cement maker said on Thursday, as part of its push toward offering additional building materials in one of its largest markets.
Omega, a privately held firm with four facilities in the western U.S., generates about $23 million a year in core earnings, Cemex said, though it did not disclose a purchase price.
The deal is expected to close in the first quarter.
The purchase “aligns with our U.S. growth strategy,” CEO Jaime Muguiro said in a statement, adding that the expansion complemented Cemex’s current operations, given Omega’s plants and customers are in many of the same western states where the Mexican firm already sells cement, aggregates and additives.
Muguiro assumed the post last year, vowing to trim the fat from one of the world’s largest cement makers. That included shedding workers and operations in non-core businesses, while doubling down on expansion in the U.S.
After cost savings, Cemex expects Omega’s value to total under seven times the core earnings as defined by EBITDA. Given an annual EBITDA of $23 million a year, that would imply an enterprise value of under $161 million.
In October, Cemex boosted its stake to a majority in southeastern U.S.-based Couch Aggregates, which produces sand, gravel and crushed stone.
(Reporting by Kylie Madry; Editing by Janane Venkatraman)
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