Dive Brief:
- Steel and metal manufacturer Commercial Metals Co. acquired a synthetic materials manufacturing site in Blackwell, Oklahoma last week.
- CMC acquired the facility from manufacturer BOSTD-Americas, which produces biaxial geogrids for soil stabilization. BOSTD-America had been working as a contract manufacturer for CMC-owned, ground stabilization and soil reinforcement solution provider Tensar. The company is now part of Tensar.
- While the acquisition will not increase manufacturing capacity at the plant, it will add to Tensar’s supply chain and the ability to add future capacity at low cost.
Dive Insight:
The Blackwell factory is contracted to produce various product lines for Tensar’s geogrid, a polymer-based product used to stabilize ground and pavement and reinforce soil in construction applications, including public infrastructure and industrial facilities.
The facility came online in June 2018 and produces and sells geogrid products, according to BOSTD-Ameria’s website. The Blackwell plant adds to Tensar’s three existing manufacturing facilities in Morrow, Georgia; Blackburn, England; and Wuhan, China.
For CMC, the acquisition is part of its plan to invest in growth projects, mergers and acquisitions to meet rising demand for its products, including Tensar, thanks to new federal infrastructure projects
“All of these facilities include multiple phases, are massive in size and consume large amounts of rebar,” Chair, President and CEO Barbara Smith said on a March earnings call. “They also require extreme structural rigidity and extensive site logistics development, which makes them attractive targets for our Tensar product line.”
The company’s strong balance sheet and financial position provide CMC flexibility to pursue growth projects and M&A opportunities, SVP and CFO Paul Lawrence said on the call.
The acquisition of the BOSTD-America facility adds to CMC’s other M&A deals this year. In March, CMC acquired two companies: metal recycling company Roane Metals Group and post-tensioning, barrier cable and concrete restoration solution provider Tendon Systems.
