Astec Industries, Inc. has purchased two full-line concrete batch plant manufacturers — the Nebraska-based Concrete Equipment and Canadian-based BMH Systems — to help expand the company's concrete plant offerings.
The Chattanooga-based Astec didn't reveal details of the purchase, but the two companies had sales last year of about $50 million and the purchase is expected to help boost per-share earnings for the company. Astec will buy the companies with cash on hand.
In response to the purchase Monday, Astec shares were trading higher Monday.
"The addition of these highly regarded brands, along with our existing RexCon brand of concrete products will significantly strengthen our ability to serve our customers' needs - Rock to Road," Astec CEO Barry Ruffalo said. "By bringing these product lines together, our global customers will have access to the most robust line of concrete products in the infrastructure industry. Both organizations are an excellent cultural fit with Astec, as they are customer-focused, innovative and performance-oriented."
The purchase of Concrete Equipment and BMH Systems come less than three years after Astec bought RexConn LLC in October 2017 for $26 million.
Ruffalo, who cut staff and expenses last year after succeeding Ben Brock as Astec CEO, said the latest acquisitions "reflect our disciplined capital allocation process, and we maintain significant financial flexibility as we continue to effectively manage our operations in this unprecedented environment."
Concrete Equipment, or CON-E-CO, is headquartered in Blair, Nebraska. The company designs, manufactures and supports a complete line of portable and stationary concrete batch plants, mixers, material handling systems, and dust control.
BMH Systems, headquartered in Montreal, Canada, specializes in high performance concrete batch plants, bagging plants and custom batch plants.
Astec Industries, Inc., which makes specialized equipment for asphalt road building, aggregate processing, and concrete production ,is scheduled to post quarterly earnings Wednesday. Analysts surveyed by Zack's Research estimate earnings will drop by 66.7% from a year ago.
Revenues are expected to be $236.13 million, down 22.5% from the year-ago quarter, as coronavirus shutdowns limited sales in the three-month period.