Summit Materials, Inc. (SUM) on Q1 2021 Results - Earnings Call Transcript

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Summit Materials First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be question and answer session. I'll now turn the conference over to Karli Anderson. Please go ahead. Karli Anderson: Welcome to Summit Materials' first quarter 2021 results conference call. We issued a press release yesterday afternoon detailing our financial and operating results. This call is accompanied by our investor presentation and an updated supplemental workbook highlighting key financial and operating data, all of which are posted on the Investors section of our website. Anne Noonan: Good morning, everyone, and thank you for joining our first quarter 2021 earnings call. We'll begin on Slide 4 of the presentation with an overview of our first quarter performance. Before I brief you on our operating and financial results, consistent with our normal practices at Summit, I would like to start by providing an update on safety. Safety is the single most important core value driving the daily actions of all Summit employees. Our highest priority is that all of our approximately 6,000 employees uphold the highest standards for safety and return home safely after every workday. Our focus continues to be on driving a zero incident safety culture. I am pleased to report that many of our operating companies have achieved zero recordable incidents year-to-date. Safety is a core value. And at Summit, we are committed to a journey of improving our performance every minute of every day to ensure that we keep our employees and the communities that we serve safe. Enhanced safety and distancing protocols are still in place throughout the company in response to COVID-19, ours is an essential business, and we take that responsibility seriously. A few of our offices remain closed and continue to have remote workers subject to local guidelines. However, we expect to complete the transition to in person working to the entire employee base over the next few months, provided that local health conditions continue to improve. I'll turn now to our financial and operating results. After a strong finish 2020, Summit has accelerated into 2021 with record first quarter results. Migration activity continues to favor our rural and exurban markets and most of the state departments of transportation that we serve are on solid financial footing. Brian Harris: Thank you, Anne. On Slide 12, we've provided our net revenue bridge comparing Q1 2021 to Q1 2020. Summit's net revenue increased $56.1 million or 16.4% in the first quarter of 2021 and to $398.5 million compared to $342.4 million in the first quarter of 2020 on higher aggregates, ready-mix concrete, cement, asphalt and paving revenue relative to a year ago due to strong demand in most markets. Our West segment led the way, contributing an incremental $37.6 million organic net revenue on higher aggregate and ready-mix volumes, particularly in Utah and Texas. We also benefited from an incremental $12.7 million in revenue associated with acquisitions of operations in Texas, and British Columbia that closed in the third quarter of last year. Our East segment net revenue was up $3.1 million as we had higher volumes in Virginia, parts of Kansas and Kentucky relative to a year ago. Our Cement segment net revenue was up $2.7 million in Q1 relative to the prior year quarter on stronger demand, particularly in the southern markets and the earlier opening of the river for North band barge traffic. Turning to Slide 13. We provided our Q1 adjusted EBITDA bridge. We ended the quarter at $41.7 million, up over 167% from a year ago. The biggest drivers of the increase were record organic West segment performance relative to a year ago, as well as higher returns from cement. Turning to Slide 14. You'll see key GAAP financial metrics. We reported an operating loss of $25.1 million in the first quarter 2021, an improvement of 39.9% compared to an operating loss of $41.7 million in the prior year period. Net revenue gains in all lines of business exceeded increases in cost of revenue and more than offset a $10 million increase in general and administrative expenses, which included $3.4 million in severance and related costs as well as increased professional fees associated with optimizing organizational efficiencies. Reported first quarter 2021 net loss attributable to Summit, Inc. of $25 million or $0.19 per basic share was an improvement of 50% relative to a year ago, and we reported a net loss of $45 million or $0.40 per basic share. This reflected substantially higher performance in our West segment relative to a year ago together with a $15.7 million gain on sale of a business unit. Turning to Slide 15. We presented several non-GAAP financial metrics where we compare Q1 2021 to Q1 2020 as well as the trailing 12-month comparison. Adjusted cash gross profit margin expanded by an impressive 580 basis points in the first quarter and expanded by 130 basis points on a trailing 12-month basis on a combination of higher volume and price improvements from aggregates, ready-mix and asphalt in nearly all of our markets. Adjusted EBITDA margins expanded 590 basis points for the quarter, and on a trailing 12-month basis, we are at 23.2%, which is an increase of 50 basis points. Adjusted diluted net loss improved 31% in Q1 2021 to $38.9 million or $0.33 per share relative to Q1 2020. Turning to Slide 16. We've provided a comparison of our price and volume for the first quarter 2021 versus Q1 2020. Organic average selling prices in the first quarter of 2021 were unchanged for aggregates and increased 0.4% in cement, 3.7% in ready-mixed concrete and 5.5% in asphalt. While most of Summit's geographies reported higher average selling prices for aggregates in the 2% to 6% range in the first quarter 2021, higher volumes of base material in the product mix in our Kansas and North Texas markets resulted in a lower reported company-wide average selling price than the prior year period. By way of reminder, our annual price increases don't go into effect until the start of the season, which is typically April 1. Sales volumes in a traditionally low first quarter increased 20.7% in aggregate, 13.7% in cement, 7.6% in ready-mix concrete and 15.9% in asphalt relative to the same period last year on strong demand in most of our markets as well as the impact of recent acquisitions. Turning to Slide 17. We provided adjusted cash gross margin in the first quarter 2021 versus Q1 2020 as well as the trailing 12-month comparison in all lines of business. Aggregates margins expanded 370 basis points in the first quarter to 41.8%, reflecting stronger aggregates pricing in most of our geographies. On a trailing 12-month basis, the margin percentage declined by 140 basis points. However, actual gross margin dollars increased by $14.4 million. Our products margins expanded by 220 basis points for first quarter and 130 basis points for the trailing 12 months as we experienced sustained volume and pricing growth for our downstream businesses, particularly in Utah and Texas. Margins in our services business expanded significantly, moving from negative 8.3% in Q1 2020 to positive 9.5% in Q1 2021, reflecting an unseasonably strong level of activity. The trailing 12-month margin improved by 610 basis points, reflecting the underlying strength of our Texas markets. Cement margins expanded significantly in Q1 and 230 basis points for the trailing 12 months to 40.8% as higher volumes resulted in lower unit plant costs. Our Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020. And the river reopened to North brand traffic 2 weeks earlier than normal, which allowed shipping to northern customers and earlier movement of inventory. Materials and products comprised 91% of our trailing 12-month adjusted cash gross profit, a slight increase from 88% for full year 2020. And we continue to expect the contribution from materials will be an increasing proportion of our EBITDA as we pursue our greenfield strategy, experienced organic growth in our markets, engage in M&A and divest underperforming downstream assets. On Slide 18, I'd like to highlight some modifications to our reporting structure for fixed production overhead and transaction costs which resulted in changes to our guidance for G&A expenses. Beginning in the first quarter of 2021, we are reporting fixed overhead expenses related to production in cost of revenue. Previously, we reported fixed production overhead expenses as general and administrative costs. Transaction costs, which were previously included in operating income or loss have been moved into G&A. We believe these reporting changes will foster greater transparency in comparability to our peers as we measure our performance. For quarterly modeling purposes for 2021, we estimate that G&A will now be in a range of $50 million to $55 million. We estimate that interest expense should be in a range of $22 million to $24 million and DD&A should be $54 million to $57 million. For the purposes of calculating adjusted diluted earnings per share please use the share count of $118 million, which includes 115.4 Class A shares and 2.6 million LP units. Turning to Slide 19, you'll see a summary of Summit's capital structure. Our Q1 2021 leverage ratio at 3.2 times was down by 0.6 times from Q1 2020, which is the lowest first quarter leverage ratio in Summit's history. Our leverage ratio typically increases in the first quarter as Q1 has the lowest EBITDA contribution of the year and relatively high capital expenditure. However, proceeds from the sale of a business unit combined with a strong financial performance allowed us to hold the leverage ratio constant. Our closing cash position was $359.7 million, which was an increase of over $150 million from Q1 2020. Moody's upgraded Summit Materials LLC Corporate family rating to BA3 from B1, citing continued strengthening of Summit Materials credit profile following the steady improvement in operating performance, higher predictability in free cash flow and robust operating fundamentals. Combined with our undrawn revolver, Summit had over $650 million in available liquidity at the end of the first quarter. Our Elevate Summit goal is less than 3 times leverage, and we believe that is within our sights in 2021. And with that, I'll turn the call back over to Anne for her closing remarks. Anne Noonan: Thanks, Brian. On Slide '21, we've provided our outlook for this year which is unchanged from the guidance we provided on our last earnings call. We expect to revisit this forecast as the year progresses. For 2021, we expect to generate adjusted EBITDA of $490 million to $520 million, which at its midpoint assumes growth of 5% over 2020. We expect to spend $200 million to $220 million on CapEx, of which $25 million to $35 million will be related to greenfield. We continue to expect low to mid-single-digit price increases for aggregates and cement and low single-digit volume increases in those lines of business. We expect asphalt pricing and volume to be relatively flat. While our first quarter performance was excellent, it's important to acknowledge that our Q1 adjusted EBITDA represents just 9% of the midpoint of our full year outlook. So we believe making adjustments at this stage would be premature. Concluding on Slide 22, it is early days for the Elevate Summit strategy. We've listened and learned, and we are turning that feedback into action. We have a lot on our collective plates at the moment, but we, as a management team, believe this approach, market leadership, asset light approach, social responsibility and innovation will deliver better and more consistent results to our stakeholders over time. With that, I'd like to turn it over to the operator for questions. Operator? Operator: Our first question comes from Stanley Elliott with Stifel. Stanley Elliott: Could you give us a little more color on the divestitures, I believe, it was glass aggregates in the downstream business. Curious what they would have in common, if these were running below corporate average margins, if they were somewhat isolated, I know that market penetration has been a key focus on part of the Elevate strategy. And I'll hang-up and listen. Anne Noonan: Thanks for your question. So the first divestiture we did was the glass aggregates business, and that's an example of a business that was basically in a low growth market, underperforming and just a little bit more color on that. It was actually tied to a long-term supply agreement that limited our ability to really get the margins and ROIC to the point we would meet our targets that we've set in place. And we weren't just the rightful owner. So it was much better. In this case, it wasn't strategically core either to sell the business, get $33 million in proceeds and $15.7 million on the gain. The other business we really haven't talked about as part of our asset-light approach, but what it had in common were the things that I talked about we divested after the end of the quarter. It was one where we looked at the downstream, said we're number four or number five. It was one where we didn't see a near-term to medium-term path to get to 30% margins and over double digit ROIC without significant investment. And candidly, we have a customer where we could develop a win-win relationship with, have a long-term ag supply agreement and it was net better for both parties. So it really fit right in that sweet spot of where we said we would use an asset-light approach. Operator: And your next question comes from Phil Ng with Jefferies. Phil Ng: Congratulations on a really impressive quarter and a great start to the year. Your unchanged guidance implies organic volume declines for aggregates, which seems pretty conservative, just given how things are shaping up so far. But curious to get any color on bidding activity? And any color on the lag on volume for some of the stimulus money called out and perhaps anything on the deferred letting work that you call out on Missouri as well? Anne Noonan: Okay. Just a couple of things. So on our guidance, we had a very clear for the midpoint, low to mid-single-digit assumption on price for aggregates in cement and a low single-digit assumption on volume. And we did keep asphalt volume and price flat because of such a strong year in just a little bit of color on bidding activity. Texas is very, very strong for us and continues to be that. We did talk in our prepared comments about the fact that we're seeing a little -- we expect some decrease in the Panhandle, but we're seeing a bigger backlog in the Permian. So overall, Texas is just very strong for us. As we look across all of our markets, Salt Lake city continues to be strong from the public funding perspective, $263 million in stimulus. Kansas, very strong budget, $1.9 billion this year, $2.2 million next year. And then Missouri, $360 million has been put back into projects that was deferred and has now more stimulus of $437 million. So not at the levels that we've seen. I would say when we look at public spending across the board. We're saying it's normal course, but we're not seeing that stimulus money, really be seeing widespread growth at this point in time. And I think that's going to take some time for that to actually work through as we see the volumes grow. But we're cautiously optimistic about where we sit today on our volumes. Operator: Our next question comes from Kathryn Thompson with Thompson Research. Kathryn Thompson: This really surround supply chain and a broader question. Broadly speaking, first, could you clarify how the Texas fees impacted quarterly earnings? And what if any challenges you are facing from a supply chain standpoint? And along with that, with cement, certain parts of the U.S. are seeing tight supply with markets such as Texas on allocation now. How does that look like for you as you're planning over the next several months? Anne Noonan: Thanks Kathryn. The Texas freeze, we had impact for about two weeks, and it was indeed impact because that's another year-round business for us, but the team did a phenomenal job in catching back up and ended up with a strong quarter, delivering really strong earnings. So it just shows the robustness of that business. From a supply chain perspective, we have not seen any very significant impacts on our supply chain at this point in time. I will say that cement supply demand dynamics have definitely tightened, particularly in Q1. And we've seen in a few of our key markets, we are on allocation. We have very strong relationships with our suppliers. So we -- the teams doing -- our regional presidents are doing a great job working through that. But cement overall nationally is definitely tight. But so far, we're able to manage it, but watching it very closely. And we are able to -- in our strong markets, and this is why we play in the downstream in certain markets. We are able to pass that cement price along, and our team is very focused on price execution and working with our customers to drive it through the supply chain. Operator: Next question comes from Trey Grooms with Stephens. Noah Merkousko: This is actually Noah Merkousko on for Trey. So I wanted to ask, the EBITDA margin in the quarter was really impressive. Can you give us any update on timing for when you think you can reach the high end of your Horizon 1 margin goal? I think it's 25%. Anne Noonan: We haven't given specific timing to that at this point in time. I will say we're making very good progress, and it will really depend on how we get the schedule. A lot of these horizons when you look at our three horizons, let me step back for a minute, really will overlap a little bit. So we've said on that first horizon, we're trying to get 23% to 26% as a range. The reason we've ranged it because it will depend on how many of the divestitures we get done in Horizon 1, and how quickly we get those proceeds back in and reinvest it into the business. So we're moving, I would say, very fast. The team is doing a great job, but we're not sacrificing value generation for our shareholders in doing so, and continued focus on price will also, obviously, bring us heavily towards improving margins as we've shown this quarter. Operator: Next question comes from Garik Shmois with Loop Capital. Garik Shmois: You discussed the tight supply situation, Cement. Just curious if you could provide any thoughts on the potential second price increase later this year? And then same in aggregates, we've heard from several of your peers regarding targeted midyear price increases, any thoughts to additional pricing in aggregates as well? Anne Noonan: So let me, first of all, address Cement, Garik. So as you know, we announced a price increase in Q4, and that's just coming into play here in April. So we'll be able to report on that as the quarter proceeds here along the river and see how our price execution actually goes. Clearly, in Q4, volumes were not as robust as they are in Q1. So the supply demand tightness is something we're watching. But we also, as we've talked about many times before, in segments of our market, it's very important to understand the competitive dynamics. I would not rule out another price increase in cement. Our team is very focused on value pricing. Of course, working with our customers to make sure that they can drive it down the supply chain. So we'll continue to look at that and report out as we go. From an aggregates perspective, our first quarter numbers, as we said in our prepared remarks, were a little impacted by mix. I would say price increases in aggregates are just coming in again. Most of our price comes in April. It's -- our first quarter, as we reported had double-digit volume growth year-over-year in most of our aggregate markets. And frankly, in most of our regions, we had 2% to 6% price increases. Because it's such a low volume quarter, we did see some base material that we sold in Kansas and North Texas, bring down our overall pricing, but the thing that we were very encouraged by, obviously, is the increase in adjusted cash gross profit margins to 20.4%, expanding by 581 basis points. We will continue, though, to monitor market conditions and closely look at competitive dynamics and we'll be very intentional and strategic with price increases as we proceed. Right now, we're sticking to our guidance of low to mid-single-digit price, but we will report on that as the year progresses. Operator: Your next question comes from David MacGregor with Longbow Research. Joe Nolan: This is Joe Nolan on for David. Congrats on a great quarter. I just wanted to ask about cost inflation, just how you're thinking about some of the different buckets there for the remaining of the year. And just when you think those might peak? And just any detail you can provide there? Brian Harris: Thanks, Joe. Thanks for your question. It's obviously a hot topic these days on inflation. At this point, we're not seeing anything that would exceed the levels that we had baked into our original guidance numbers. We're obviously watching it very closely in the strongest of the markets, and we will be reactive if we see an opportunity to pass any inflationary increases on -- in price. We're seeing that, obviously, where we get cement price increases. We are able to pass that on in ready-mix when the demand in the market is strong. Other things that we baked into our guidance and our original assumptions were health care, which we saw about an 8% increase in labor, where we saw approximately 3% increase. Now we did bake price increases in cement into our assumptions. And everything else was really running at about 3% broadly. We've obviously hedged our diesel. And right now, in Q1, we're showing a little bit of favorability on the actual costs compared to the prior year. And we're not really seeing anything else on the energy input prices that would be above the assumptions that we made in our original guidance. So far fairly stable our inflation that obviously something that we’re watching very closely. Operator: Next question comes from Anthony Pettinari with Citi. Anthony Pettinari: Last quarter, I think you pointed to the potential nonrepeat of wind farm work as a swing factor. Just wondering if you're seeing any trends in that end market? And then just maybe circling back to full year guidance more broadly. Are there any other swing factors that you'd kind of call out that might get you ultimately to the higher end or the lower end of the range? Anne Noonan: Yes, Anthony. So thanks for the question. So wind farm work, obviously, we did call that out last quarter as saying that if you look on a 2020 basis, we actually had a number of wind farm projects that are nice price mix, frankly, for the business. In Q1, this is where some of the pricing was negatively impacted because we had 1 wind farm this quarter. But prior year, we had more than that. So we're watching that. And as we said, this type of work is a little bumpy. And it's basically we bid and we win the job in the year, and we construct. So we continue to look at that. Longer term, we see this as nice work and a very good use of our aggregates and our business moving forward. So -- and it will drive more demand for alternative energy. On a full year guidance perspective, we've talked to what our assumptions are within the midpoint of the guidance. If we look at the low end, we would say that would be driven as we typically would look at our low-end by decreased pricing or lower pricing and volume and maybe some minor weather impacts. On the higher end, though, to specifically address your question, we would have there an assumption of having prices maybe across all of our lines of business. And also single to mid-digit volume growth across all of the lines of business. So they'd be kind of swing factors as we kind of think about the range of guidance. But as the year procedure when we get past our lowest quarter of the year, we will continue to assess our guidance and be very thoughtful about how we give you guys that number. Operator: Your next question comes from Mike Dahl with RBC Capital Markets. Mike Dahl: And I wanted to follow-up on kind of the divestiture plan. And so you went out publicly to the market, to investors with some of the high level details as two months ago. My question is, since that time, how have the discussions progressed. And I guess I'm thinking more from the standpoint of, have you started to receive more inbound inquiries into some of your assets? And to the extent that you've had additional discussions, whether it's proactive or reverse inquiry. Has any of that changed your view on number of assets, proceeds specifics around which assets might ultimately fall in the bucket of divestitures? Anne Noonan: Yes, Mike, thanks for your question. So you're absolutely correct. We do come out with 10 to 12 assets. And I think, quoted a number over $200 million in proceeds with our best estimate at that time. As we discussed, we completed one this in Q1, and we have another one, several that are actually completed at this point and some that are in process and some that we're just starting. With respect to your question around inbounds, we actually have received a lot more inbounds because we announced that. I would say, though, that it hasn't really changed our view. But in saying that, I think I was very clear on our March 16 meeting that as we get past this first Horizon 1, where we've identified this set of 10 to 12 assets that are really no regret moves for us to divest. We will continually look at our portfolio and optimize it. And an asset that may seem perfectly good in the portfolio today may not belong in our long-term future portfolio. So I believe strong businesses constantly assess their portfolio to see how they can increase value for the shareholders and their overall stakeholder base. So we will continue to update you as we look at that and as we change and make firm decisions around divestitures or acquisitions. Operator: And our next question comes from Jerry Revich with Goldman Sachs. Jerry Revich: I'm wondering if you can touch on the volume cadence in the business over the course of the quarter. Optically, you were coming off of pretty tough comps for your aggregates business, and it seems like the comps do get easier on a 2-year stack basis in the second quarter. So I'm wondering if you could just comment on the flow of demand over the course quarter and touch on how April look just to help us understand the cadence. Anne Noonan: Well, our volume cadence, we were strong at the end of 2020, and that continued right into Q1. Obviously, our comps were somewhat different as we got into Q1 of 2021 because we had COVID impact last year. But we also had very robust demand here in 2021 in Q1, and we did hit record volumes as we went into that. So we're actually very positive about the level of fundamental growth that we're getting from in migration and from our public spend. So I wouldn't say there's really a cadence beyond that. As we go into Q2, clearly a much bigger comp for us on volume. And the level of public spending, residential, continuing strong. We see that our demand -- we have nothing to say that demand will not continue. As I said, in nonres, wind farms provide a little bit of bumpiness to our numbers at times. That may be the only thing I would say from a volume cadence perspective that might have impact. But overall, I would expect that unless something drastic would happen with respect to public funding, which is steady right now, and we would call it normal levels, not high levels of funding, we should be in a pretty good shape in Q2. But you're correct, Jerry, at pointing out that it is a tougher comp for us. Operator: This concludes our question-and-answer session. I will now turn the call back over to Anne Noonan for closing remarks. Anne Noonan: Thank you, operator, and thank you all for joining us. I'd like to leave you with three messages. First, Summit is in the right place at the right time. Megatrends are coalescing in Summit’s key markets and all require some form of aggregates, ready mixed concrete, cement, asphalt and/or paving and a combination thereof. Second, we are seeing signs of early success towards our Elevate Summit goals. It may not be a linear upward trajectory every quarter due to the nature of our strategic priorities, but we will be transparent and relentlessly focused on execution. And finally, we are creating a culture of excellence across the business for Summit to standardize and simplify and also to lead in social responsibility and innovation that will drive long-term sustainable growth that is not dependent on any one market or geography. That concludes our call. Thank you, and have a good day. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
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Summit Materials, Inc. (NYSE:SUM) Acquisition by Quikrete Holdings: A Strategic Move in the Construction Materials Industry

  • The acquisition of Summit Materials, Inc. (NYSE:SUM) by Quikrete Holdings, Inc. is valued at $52.50 per share in cash, closely aligning with the market's current valuation.
  • Summit Materials has experienced a recent price increase, suggesting positive market sentiment influenced by the acquisition news.
  • The merger is expected to conclude in the first quarter of 2025, pending regulatory and stockholder approvals, marking a significant milestone in the construction materials industry.

Summit Materials, Inc. (NYSE:SUM) is a leading producer of aggregates and cement, playing a significant role in the construction materials industry. The company is currently in the spotlight due to its impending acquisition by Quikrete Holdings, Inc. This acquisition is valued at $52.50 per share in cash, aligning with the price target set by Trey Grooms from Summit Redstone Partners.

On January 7, 2025, Trey Grooms set a price target of $52.50 for SUM, closely matching the current stock price of $52.14. This indicates a minimal price difference of approximately 0.69%. The stock has seen a recent price increase of $1.04, or 2.04%, suggesting positive market sentiment possibly influenced by the acquisition news.

The acquisition process has reached a significant milestone with the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. This development is crucial for the merger's progress, which is expected to conclude in the first quarter of 2025, subject to regulatory and stockholder approvals.

SUM's stock has shown volatility, with today's trading range between $50.93 and $52.17. Over the past year, the stock has fluctuated from a low of $34.38 to a high of $53.49. The company's market capitalization stands at approximately $9.17 billion, with a trading volume of 11.46 million shares, reflecting active investor interest.

The acquisition by Quikrete Holdings, Inc. is a significant event for Summit Materials, potentially impacting its market position and future growth. As the merger progresses, investors will closely monitor regulatory approvals and stockholder decisions, which are critical for the deal's successful completion.

Summit Materials, Inc. (NYSE:SUM) Acquisition by Quikrete Holdings: A Strategic Move in the Construction Materials Industry

  • The acquisition of Summit Materials, Inc. (NYSE:SUM) by Quikrete Holdings, Inc. is valued at $52.50 per share in cash, closely aligning with the market's current valuation.
  • Summit Materials has experienced a recent price increase, suggesting positive market sentiment influenced by the acquisition news.
  • The merger is expected to conclude in the first quarter of 2025, pending regulatory and stockholder approvals, marking a significant milestone in the construction materials industry.

Summit Materials, Inc. (NYSE:SUM) is a leading producer of aggregates and cement, playing a significant role in the construction materials industry. The company is currently in the spotlight due to its impending acquisition by Quikrete Holdings, Inc. This acquisition is valued at $52.50 per share in cash, aligning with the price target set by Trey Grooms from Summit Redstone Partners.

On January 7, 2025, Trey Grooms set a price target of $52.50 for SUM, closely matching the current stock price of $52.14. This indicates a minimal price difference of approximately 0.69%. The stock has seen a recent price increase of $1.04, or 2.04%, suggesting positive market sentiment possibly influenced by the acquisition news.

The acquisition process has reached a significant milestone with the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. This development is crucial for the merger's progress, which is expected to conclude in the first quarter of 2025, subject to regulatory and stockholder approvals.

SUM's stock has shown volatility, with today's trading range between $50.93 and $52.17. Over the past year, the stock has fluctuated from a low of $34.38 to a high of $53.49. The company's market capitalization stands at approximately $9.17 billion, with a trading volume of 11.46 million shares, reflecting active investor interest.

The acquisition by Quikrete Holdings, Inc. is a significant event for Summit Materials, potentially impacting its market position and future growth. As the merger progresses, investors will closely monitor regulatory approvals and stockholder decisions, which are critical for the deal's successful completion.