Martin Marietta to Buy Lehigh Hanson’s West Region Business for $2.3B

Martin Marietta (MLM) has tabled a $2.3 billion takeover bid for Lehigh Hanson’s West Region Business.  The transaction should close before year end, subject to regulatory approvals.

Leigh Hanson’s building material manufacturing business will join Martin Marietta’s building material supply business, bringing 17 quarries and two cement plants. The acquisition will expand Martin Marietta’s footprint into some of the nation’s largest and fastest-growing regions.

The acquisition is consistent with the company’s strategic initiatives that seek to enhance its footprint. Once the takeover closes, it should expand Martin Marietta product offerings across the U.S. (See Martin Marietta stock analysis on TipRanks)

“With this acquisition, our Company will be well-positioned to capitalize on long-term demand drivers from increased state infrastructure investment in California and Arizona as well as continued private-sector growth across these regions. We are confident in our ability to quickly realize the benefits of this transaction following the same proven approach we took with our acquisitions of TXI and Bluegrass,” said CEO Ward Nye.

Raymond James analyst Joshua Wilson has reiterated a Hold rating on the stock, following a first-quarter earnings report that topped expectations.

“Martin beat both our model and consensus 1Q21 expectations almost entirely on stronger than expected aggregates segment margins, the sustainability of which we believe will be the focus of the conference call. Martin reiterated its annual guidance (i.e., implied EBITDA for the remainder of the year missed views on an organic basis),” wrote Mr. Wilson in a research note to investors.

Consensus among analysts on Wall Street is a Moderate Buy based on 2 Buy and 3 Hold ratings. The average analyst price target of $402 implies 9.70% upside potential to current levels.

MLM scores 8 out of 10 on TipRanks’ Smart Score rating system, suggesting it is likely to outperform the overall market.

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