Martin Marietta: Sale of Texas Cement Assets Doesn’t Change Our Long-Term Outlook

Martin Marietta announced it has reached a deal with CRH Americas Materials to sell its South Texas cement business and some other related concrete operations for $2.1 billion in cash. Martin Marietta is selling its Hunter cement plant in New Braunfels, Texas, and 20 concrete plants in Texas as well. The assets included in the sale are estimated to generate $170 million in pro forma 2023 EBITDA, representing a 12.4 times multiple for the deal. While Martin Marietta is selling assets in the fast-growing Texas cement market, we think the company received a fair price for the business and will likely use the proceeds to improve its aggregates business. As such, we have increased our fair value estimate to $330 from $325 per share.