MEXICO CITY, Feb 26 - Mexico-based Cemex has agreed to acquire Omega Products International, a privately held U.S. manufacturer of stucco with four facilities located in the western United States, the cement company announced on Thursday.
Cemex said Omega produces about $23 million annually in core earnings, as measured by EBITDA. The seller’s identity and the purchase price were not disclosed. Cemex expects the transaction to conclude in the first quarter.
Strategic rationale
In a statement, CEO Jaime Muguiro said the acquisition "aligns with our U.S. growth strategy," noting that Omega’s plants and customer base overlap geographically with the western states where Cemex already markets cement, aggregates and additives. The company framed the purchase as a complement to its current product set in one of its largest markets.
Muguiro, who took the CEO role last year, has publicly committed to streamlining the business. That program has included plans to remove non-core activities and reduce staff and operations in areas outside Cemex’s prioritized markets, while simultaneously intensifying expansion efforts in the U.S.
Valuation and precedent
Cemex indicated that after anticipated cost savings, it values Omega at under seven times its defined core earnings. Using the cited annual EBITDA figure of $23 million, that multiple points to an implied enterprise value of under $161 million.
The Omega deal follows other recent U.S.-focused moves by Cemex. In October, the company increased its stake to a majority position in Couch Aggregates, a southeastern U.S. producer of sand, gravel and crushed stone.
Impacted sectors
- Building materials and construction supply chains in the western United States
- Aggregates and cement markets where Cemex already operates
- Industrial manufacturing and regional distribution of stucco and related products