Ready Mix Ready to Change Course
The concrete maker hires Lincoln International to help it weigh strategy as it considers selling in a down market.
June 18, 2009
Ready Mix, the listed concrete company, is considering a sale, and has hired Lincoln International as its advisor to help weigh strategy.
The concrete company is looking for a buyer as the pace of the housing market, a primary outlet for its product, has slowed to a crawl.
The M&A scene surrounding the housing market has been equally slow, outside of Pulte Homes $3.1 billion all-stock purchase of smaller competitor Centex Corp., the industry has seen little M&A at a time when uncertainty has prevailed concerning when any sustained rebound can be identified.
The company said the move was “in response to recent interest,” though it did not identify bidders and declined to comment.
Indeed, Ready Mix has some green shoots to point toward. Its stock plummeted from a 52-week high of $5.60 to a low of $1.06, in early trading Thursday, while off about 10%, its shares were still being sold for $3.17, a marked improvement.
Ready Mix is based in Las Vegas, a city hit disproportionately hard by the recession, in terms of the value of its real estate and how construction there is financed.
Ready Mix’s numbers already reflect the recession’s impact, its operating income for 2008 was -$5 million and sales tumbled more than 20% to $61 million.
In March, Ready Mix reported in a federal filing that Insight Equity, which backs its former parent company, Meadow Valley, entered into a confidentiality agreement with the company now weighing sale options. In 2005, Ready Mix was spun off of Meadow Valley and into trading.
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