Elections and a ‘fiscal cliff’ loom ahead, but residential recovery continues
Better Roads Staff | October 4, 2012
By George H. Reddin
Uncertainty continues to characterize the near-term economic outlook and inhibit stronger growth and job creation. This has been a common theme for this article during the last few years and has been a major reason for the tepid pace of merger and acquisition activity.
The November elections and the pending ‘fiscal cliff’ have uncertainty at a high in the United States and, together with continued troubles in Europe, lead to economic uncertainty globally. Job creation remains the key to improvement in the construction market, and erosion of consumer and business confidence resulting from the pending 2013 fiscal cliff could result in adverse economic consequences that could slow the recovery process.
That said, the elections and fiscal cliff issues will be behind us by the second quarter of 2013, and there appears to be more optimism among U.S. producers that the residential recovery has begun. With MAP-21, there will be certainty for the next two years in the highway sector. Aggregates demand should benefit from a recovery in private construction activity and stability in highway funding, which, in turn, will be good for merger and acquisition transactions.
Oldcastle Precast, Inc. signed a definitive agreement to acquire the assets of Central Precast Concrete, Inc. and U.S. Concrete Precast Group from U.S. Concrete, Inc., which includes six precast concrete operations in California, for $21.3 million. The transaction was expected to close during the third quarter of 2012.
Clark Pacific Corp. acquired property in Adelanto and plant operations in Irwindale, Calif., from Hanson Structural Precast, Inc. The plant manufactures and supplies structural and architectural precast components. Clark Pacific Corp., founded in 1963 and based in West Sacramento, Calif., engages in the design, manufacture, and installation of architectural precast building systems in the United States.
Cemex won more than 90-percent acceptance of an offer to extend maturities on $7.25 billion of loans by three years. Support for the proposal improves Cemex’s efforts to prevent a financing crunch in 2014 by pushing maturities to 2017. Based on acceptance notices from creditors wanting the new high-yield notes, Cemex anticipates issuing a principal amount of $470 million.
Sources: New York Stock Exchange, Wall Street Journal Market Watch. Currency conversion calculated on 9/4/2012.
U.S. ON-HIGHWAY DIESEL FUEL PRICES
Sources: U.S. Energy Information Administration (dollars per gallon, prices include all taxes).
George H. Reddin is a principal in FMI’s Investment Banking practice. He can be reached at 919-785-9286 or at firstname.lastname@example.org.
MORE FROM Economics
- Congress passes spending bill; cuts billions from federal construction accounts547 Views
- Tappan Zee bridge construction shut down after silos collapse434 Views
- Last second Christmas gift ideas for highway and bridge construction workers104 Views
- Construction worker stops wrong way driver, avoids potential disaster92 Views
- Keep your laws off our ditches78 Views