UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☒		Preliminary Proxy Statement
☐		Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to §240.14a-12

U.S. CONCRETE, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☐		No fee required.
☒		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)		Title of each class of securities to which transaction applies:   Common stock, par value $0.001 per share
		(2)		Aggregate number of securities to which transaction applies:   As of June 28, 2021, (a) 17,140,891 shares of common stock issued and outstanding (to be canceled in exchange for a cash payment of $74.00 per share upon consummation of the merger described in this proxy statement) and (b) 464,051 shares of common stock underlying outstanding vested and unvested restricted stock units to be canceled in exchange for a cash payment of $74.00 per share underlying a restricted stock unit.
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):   Solely for the purpose of calculating the filing fee, the aggregate value of the transaction was calculated based on the sum of (a) 17,140,891 shares of common stock issued and outstanding multiplied by $74.00 and (b) 464,051 cashed-out restricted stock units multiplied by $74.00. In accordance with Exchange Act Rule 0-11(c), the filing fee was determined by multiplying 0.0001091 by the sum of the preceding sentence.
		(4)		Proposed maximum aggregate value of transaction:   $1,302,765,708.00
		(5)		Total fee paid:   $142,131.74
☐		Fee paid previously with preliminary materials.
☐		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
		(1)		Amount Previously Paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing Party:
		(4)		Date Filed:

 

 

 

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION

DATED JULY 1, 2021

 

U.S. CONCRETE, INC.

331 N. Main St.

Euless, Texas 76039

[•], 2021

To Our Stockholders:

You are cordially invited to attend a special meeting of stockholders (the “special meeting”) of U.S. Concrete, Inc., a Delaware corporation (the “Company”), to be held via live webcast on [•] at [•]. The special meeting can be accessed by visiting www.proxydocs.com/USCR, where you will be able to listen to the meeting live and vote online. Please note that you will not be able to attend the virtual special meeting in person. We have chosen to hold a virtual rather than an in-person meeting due to the continuing public health impact of coronavirus disease 2019 (COVID-19).

On June 6, 2021, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified in accordance with its terms, the “merger agreement”) with Vulcan Materials Company, a New Jersey corporation (“Parent”), and Grizzly Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“merger sub”), providing for, subject to the satisfaction or waiver of specified conditions set forth therein, the acquisition of the Company by Parent. Subject to the terms and conditions of the merger agreement, merger sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Parent.

At the special meeting, you will be asked to consider and vote on:

 

•

a proposal to adopt and approve the merger agreement (Proposal 1);

 

•

a proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to the named executive officers of the Company that is based on or otherwise relates to the merger (Proposal 2); and

 

•

a proposal to adjourn the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt and approve the merger agreement if there are insufficient votes at the time of such special meeting to approve such proposal (Proposal 3).

If the merger is consummated, the holders of the common stock, par value $0.001 per share, of the Company (the “Company common stock”) will receive $74.00 in cash, without interest, less any applicable withholding taxes, for each share of Company common stock that they own immediately prior to the time the merger becomes effective (the “effective time”), other than shares (i) owned or held in treasury by the Company or owned by Parent or merger sub immediately prior to the effective time, (ii) issued and outstanding immediately prior to the effective time that are owned by any direct or indirect wholly owned subsidiary of Parent (other than merger sub) or the Company and (iii) issued and outstanding immediately prior to the effective time (other than such shares referenced in clauses (i) and (ii)) that are held by a holder who did not vote in favor of the adoption of the merger agreement and has properly exercised appraisal rights in respect of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware.

The Board of Directors of the Company (the “Company Board”) reviewed and considered the terms and conditions of the merger agreement and the transactions contemplated by the merger agreement, including the

merger. After consideration, the Company Board unanimously (i) determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by the Company of the merger agreement, the performance by the Company of its covenants and agreements contained therein and the consummation of the merger and the other transactions upon the terms and subject to the conditions contained therein and (iv) recommended that the Company’s stockholders vote to adopt the merger agreement. Accordingly, the Company Board unanimously recommends a vote “FOR” the adoption and approval of the merger agreement and the approval of the other proposals to be voted on at the special meeting, each as described in the accompanying proxy statement.

The accompanying proxy statement provides you with more specific information about the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement. You should carefully read the entire proxy statement, including the annexes and documents referred to or incorporated by reference therein. You may also obtain more information about the Company from the documents the Company files with the U.S. Securities and Exchange Commission (the “SEC”), including those incorporated by reference into the accompanying proxy statement.

Your vote is very important. Adoption and approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock. The failure of any stockholder to vote will have the same effect as a vote against the merger agreement. Accordingly, whether or not you plan to attend the virtual special meeting, you are requested to promptly vote your shares by completing, signing and dating the enclosed proxy card or voting instruction card and returning it in the envelope provided or by voting over the telephone or the Internet as instructed in these materials. If you are a stockholder of record and you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote:

 

1.

“FOR” adoption and approval of the merger agreement;

 

2.

“FOR” approval of the non-binding named executive officer merger-related compensation proposal; and

 

3.

“FOR” adjourning the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies.

Voting by proxy will not prevent you from voting your shares by online ballot at the virtual special meeting if you choose to virtually attend the special meeting.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the enclosed voting instruction card. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt and approve the merger agreement, without your instructions.

If you have any questions or need assistance voting your shares, please contact: MacKenzie Partners, Inc., the Company’s proxy solicitor, by calling (800) 322-2885 toll-free.

Thank you for your cooperation and continued support.

Very truly yours,

 

Michael D. Lundin Chairman of the Company Board

The merger has not been approved or disapproved by the SEC or any state securities commission. Neither the SEC nor any state securities commission has passed upon the merits or fairness of the merger or upon the adequacy or accuracy of the information contained in this document or the accompanying proxy statement. Any representation to the contrary is a criminal offense.

THE ACCOMPANYING PROXY STATEMENT IS DATED [•], 2021 AND IS FIRST BEING MAILED

TO STOCKHOLDERS OF THE COMPANY ON OR ABOUT [•], 2021.

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION

DATED JULY 1, 2021

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD [•], 2021

To Our Stockholders:

A special meeting of stockholders (the “special meeting”) of U.S. Concrete, Inc., a Delaware corporation (the “Company”), will be held via live webcast on [•], at [•]. The special meeting can be accessed by visiting www.proxydocs.com/USCR, where you will be able to listen to the meeting live and vote online. You will need your control number, provided on your proxy card, to join the special meeting. We have chosen to hold a virtual rather than an in-person meeting due to the continuing public health impact of coronavirus disease 2019 (COVID-19). We encourage you to allow ample time for online check-in, which will open at [•]. Please note that you will not be able to attend the virtual special meeting in person. We are holding the special meeting for the following purposes:

 

1.

Adoption and Approval of the Merger Agreement. To consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of June 6, 2021, among the Company, Vulcan Materials Company, a New Jersey corporation (“Parent”) and Grizzly Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“merger sub”) (as it may be amended, supplemented, or otherwise modified in accordance with its terms, the “merger agreement”), pursuant to which merger sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Parent (such proposal, the “merger agreement proposal”);

 

2.

Non-Binding Named Executive Officer Merger-Related Compensation Proposal. To consider and vote on a proposal to approve, on a non-binding, advisory basis, a resolution approving the compensation that may be paid or become payable to the named executive officers of the Company that is based on or otherwise relates to the merger (such proposal, the “non-binding named executive officer merger-related compensation proposal”); and

 

3.

Adjournment of the Special Meeting. To approve the adjournment of the special meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the merger agreement proposal (such proposal, the “adjournment proposal”).

The Board of Directors of the Company unanimously recommends that the stockholders of the Company vote “FOR” the merger agreement proposal, “FOR” the non-binding named executive officer merger-related compensation proposal and “FOR” the adjournment proposal, each as described in greater detail in the accompanying proxy statement.

Only stockholders of record at the close of business on [•], 2021 are entitled to notice of and to vote at the special meeting and at any adjournment of the special meeting in accordance with the merger agreement.

For more information concerning the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement, please review the accompanying proxy statement and the copy of the merger agreement attached as Annex A to the proxy statement.

To ensure your representation at the special meeting, regardless of whether you plan to attend the virtual special meeting, you are urged to vote your shares by completing, signing, dating and returning the enclosed proxy or voting instruction card as promptly as possible in the postage-paid envelope enclosed. Alternatively, you may vote by telephone or over the Internet as instructed in these materials. If you are voting by telephone or over the Internet, then your voting instructions must be received by 11:59 p.m., Eastern Time, on the day before the special meeting. Your proxy is being solicited by the Board of Directors of the Company.

A stockholder who does not vote in favor of the merger agreement proposal will have the right to seek appraisal of the fair value of its shares if the merger is consummated, but only if such stockholder submits a written demand for appraisal to the Company prior to the time the vote is taken on the merger agreement proposal and complies with all other requirements of the Delaware General Corporation Law (“DGCL”). A copy of the applicable DGCL statutory provisions is included as Annex D to the accompanying proxy statement, and a summary of these provisions can be found under the section entitled “Appraisal Rights” in the accompanying proxy statement.

Approval of the merger agreement proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of common stock, par value $0.001 per share, of the Company (the “Company common stock”). The failure to vote will have the same effect as a vote against the merger agreement proposal. Even if you plan to attend the virtual special meeting, please complete, sign, date and return the enclosed proxy or voting instruction card or vote over the telephone or the Internet as instructed in these materials as promptly as possible to ensure that your shares will be represented at the special meeting if you are unable to attend. If you are a stockholder of record and sign, date and mail your proxy card without indicating how you wish to vote, your shares will be voted in favor of the merger agreement proposal, the non-binding named executive officer merger-related compensation proposal and the adjournment proposal. If you fail to return your proxy card, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and it will have the same effect as a vote against the merger agreement proposal. If your shares are held in “street name” and you fail to return your voting instruction card or otherwise properly instruct your broker, bank or other nominee how to vote your shares, it will have the same effect as a vote against the merger agreement proposal.

 

Euless, Texas

[•], 2021

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL SPECIAL MEETING, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE; (2) OVER THE INTERNET; OR (3) BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY OR VOTING INSTRUCTION CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY REVOKE YOUR PROXY OR CHANGE YOUR VOTE AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL MEETING.

If you are a stockholder of record, voting online during the special meeting will revoke any proxy that you previously submitted. The stockholders of record as of the close of business on the record date for the special meeting, their duly appointed proxy holders and the “street name” stockholders who beneficially owned shares of Company common stock as of the close of business on the record date are entitled to participate in the virtual meeting and will need their assigned control number to vote shares virtually at the special meeting. The control number can be found on your proxy card. If your shares are held in the name of a bank, broker or other nominee and you do not have the assigned control number, please follow the instructions on the voting instruction card, or other applicable proxy notices, furnished by your bank, broker or other nominee to vote your shares accordingly or contact your bank broker or other nominee for instructions.

If you are a stockholder of record and you fail to (1) return your proxy, (2) grant your proxy or provide voting instructions electronically over the Internet or by telephone or (3) attend and vote at the virtual special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and it will have the same effect as a vote against the merger agreement proposal.

If you hold your shares in “street name,” you will need to instruct your bank, broker or other nominee how to vote your shares in accordance with the enclosed voting instruction card provided by your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the merger agreement proposal, without your instructions. Failure to provide these instructions will have the same effect as a vote against the merger agreement proposal.

We encourage you to read the accompanying proxy statement and its annexes, including all documents referred to or incorporated by reference into the accompanying proxy statement, carefully and in their entirety. If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of Company common stock, please contact:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

(800) 322-2885

Banks and Brokers: (212) 929-5500

Email: proxy@mackenziepartners.com

TABLE OF CONTENTS

 

SUMMARY TERM SHEET			1
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND MERGER			10
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION			15
THE PARTIES TO THE MERGER			17
U.S. Concrete, Inc.			17
Vulcan Materials Company			17
Grizzly Merger Sub I, Inc.			17
THE SPECIAL MEETING OF THE COMPANY’S STOCKHOLDERS			18
Time, Place and Purpose of the Special Meeting			18
Who Can Vote at the Special Meeting			18
Quorum for the Special Meeting			18
Votes Required; Treatment of Abstentions and Broker Non-Votes			18
How to Vote			19
Revocation of Proxies			20
Adjournments			20
Householding			20
Solicitation of Proxies			20
THE MERGER (PROPOSAL 1)			22
Background of the Merger			22
Recommendation of the Company Board and Reasons for the Merger			27
Opinions of the Financial Advisors to the Company			31
Certain Company Forecasts			48
Financing of the Merger			49
Certain Effects of the Merger			50
Effects on the Company if the Merger is not Consummated			50
Interests of the Company’s Directors and Executive Officers in the Merger			51
Certain U.S. Federal Income Tax Consequences of the Merger			54
Litigation Related to the Merger			56
Regulatory Approvals			56
THE MERGER AGREEMENT			58
Explanatory Note Regarding the Merger Agreement			58
Structure of the Merger			58
Closing and Effective Time of the Merger			58
Consideration To Be Received in the Merger			59
Procedures for Surrendering Shares for Payment			59
Treatment of Company RSU Awards			60
Withholding			60
Representations and Warranties			60
Definition of “Company Material Adverse Effect”			62
Conduct of the Business Pending the Merger			63
Proxy Statement, Board Recommendation and Company Stockholders’ Meeting			65
Non-Solicitation Covenant			66
Changes in Board Recommendation			68
Agreements to Use Reasonable Best Efforts			70
Employee Benefits Matters			71
Directors’ and Officers’ Indemnification and Insurance			72
Financing and Financing Cooperation			73
Other Covenants			74
Conditions to Completion of the Merger			74

Termination of the Merger Agreement			75
Termination Fee Payable by the Company			77
Termination Fee Payable by Parent			77
Effect of Termination			78
Fees and Expenses			78
Amendments, Waivers			78
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			79
NON-BINDING NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION PROPOSAL (PROPOSAL 2)			81
ADJOURNMENT PROPOSAL (PROPOSAL 3)			82
FUTURE STOCKHOLDER PROPOSALS			83
MARKET PRICE AND DIVIDEND DATA			84
OTHER MATTERS			85
APPRAISAL RIGHTS			86
WHERE YOU CAN FIND MORE INFORMATION			91

ANNEX A—Agreement and Plan of Merger

ANNEX B—Opinion of Evercore Group L.L.C.

ANNEX C—Opinion of BNP Paribas Securities Corp.

ANNEX D—Section 262 of the Delaware General Corporation Law

SUMMARY TERM SHEET

This Summary Term Sheet, together with “Questions and Answers About the Special Meeting and Merger” beginning on page 10, summarizes certain of the material information set forth or incorporated by reference in this proxy statement. We encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement. Each item in this Summary Term Sheet includes a page reference directing you to a more complete description of that topic. See “Where You Can Find More Information” beginning on page 91 for additional information regarding the documents incorporated by reference in this proxy statement. In this proxy statement, the terms “the Company,” “we,” “our” and “us” refer to U.S. Concrete, Inc. and its consolidated subsidiaries taken as a whole, unless the context requires otherwise.

The Parties to the Merger (page 17)

U.S. Concrete, Inc., a Delaware corporation, is a leading heavy building materials supplier of aggregates and ready-mixed concrete in select geographic markets in the United States, the U.S. Virgin Islands and Canada. The Company is a leading supplier for large-scale commercial and industrial, residential and infrastructure (including streets, highways and other public works) construction projects in high-growth markets across the U.S. The Company is headquartered in Euless, Texas.

Vulcan Materials Company, a New Jersey corporation (“Parent” or “Vulcan”), is the nation’s largest supplier of construction aggregates (primarily crushed stone, sand and gravel), a major producer of asphalt mix and ready-mixed concrete, and a supplier of construction paving services. Vulcan is headquartered in Birmingham, Alabama.

Grizzly Merger Sub I, Inc., a Delaware corporation (“merger sub”), is a wholly owned subsidiary of Parent formed by Parent solely for the purpose of engaging in the transactions contemplated by the merger agreement. Upon completion of the merger, merger sub will merge with and into the Company, and merger sub will cease to exist.

The Merger (page 22)

You are being asked to adopt and approve the Agreement and Plan of Merger, dated as of June 6, 2021, among the Company, Parent and merger sub (as it may be amended, supplemented, or otherwise modified in accordance with its terms, the “merger agreement”), pursuant to which, subject to the terms and conditions set forth therein, merger sub will be merged with and into the Company (the “merger”), with the Company surviving the merger as a wholly owned subsidiary of Parent. Upon completion of the merger, the Company will cease to be a publicly traded company, and you will cease to have any rights in the Company as a stockholder except the right to receive the merger consideration.

Consideration To Be Received in the Merger (page 59)

If the merger is consummated, each share of the Company’s common stock, par value $0.001 per share (the “Company common stock”), other than as provided below, will be converted into the right to receive $74.00 in cash, without interest, less any applicable withholding taxes (the “merger consideration”). The following shares of Company common stock will not be converted into the right to receive the merger consideration in connection with the merger: (i) shares owned or held in treasury by the Company or owned by Parent or merger sub immediately prior to the effective time, (ii) shares issued and outstanding immediately prior to the effective time that are owned by any wholly owned subsidiary of Parent (other than merger sub) or the Company and (iii) shares issued and outstanding immediately prior to the effective time (other than such shares referenced in clauses (i) and (ii)) that are held by a holder who did not vote in favor of the adoption of the merger agreement and has properly exercised appraisal rights in respect of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”).

 

1

Treatment of Company RSU Awards (page 60)

Subject to the terms of the merger agreement, at the effective time, pursuant to the applicable Company stock incentive plan, each restricted stock unit award covering shares of Company common stock (“Company RSU Award”) that is outstanding and unvested immediately prior to the effective time of the merger will become vested and be settled in cash, without interest, in an amount equal to (x) the number of shares subject to the applicable RSU award, multiplied by (y) the $74.00 per share merger consideration, less any applicable tax withholding. The number of shares of Company common stock subject to any portion of any Company RSU Award that otherwise vests based on achievement of pre-established performance criteria will be determined in accordance with the terms of the applicable Company RSU Award agreement and, to the extent applicable, any other written agreement between the Company and the holder of the Company RSU Award. For more information, see “The Merger Agreement—Treatment of Company RSU Awards.”

When the Merger is Expected to be Consummated

The Company currently anticipates that the merger will be consummated in the second half of calendar year 2021. However, there can be no assurances that the merger will be completed at all, or if completed, that it will be completed in 2021. Completion of the merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to the completion of the merger, which are described below and include regulatory clearances and approvals, and it is possible that factors outside the control of the Company or Vulcan could delay the completion of the merger, or prevent it from being completed at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required approvals.

The Special Meeting (page 18)

A special meeting of our stockholders will be held via live webcast on [•], at [•] (the “special meeting”). The special meeting can be accessed by visiting www.proxydocs.com/USCR, where you will be able to listen to the meeting live and vote online. You will need your control number, provided on your proxy card, to join the virtual special meeting. Please note that you will not be able to attend the virtual special meeting in person. At the special meeting, you will be asked to, among other things, vote for the merger agreement proposal. See “Questions and Answers About the Special Meeting and Merger” and “The Special Meeting of the Company’s Stockholders.”

Record Date and Quorum (page 18)

Only holders of record of Company common stock, as of the close of business on [•], 2021, the date established by the Board of Directors of the Company (the “Company Board”) as the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. On the record date, there were [•] shares of Company common stock outstanding.

To conduct any business at the special meeting, a quorum must be present virtually or by proxies. The holders of a majority of the shares of Company common stock outstanding and entitled to vote at the meeting, present virtually or by proxy, will constitute a quorum for the transaction of business at the special meeting. For more information, see “The Special Meeting of the Company’s Stockholders—Who Can Vote at the Special Meeting” and “The Special Meeting of the Company’s Stockholders—Quorum for the Special Meeting.”

Votes Required (page 18)

Adoption and approval of the merger agreement (the “merger agreement proposal”) requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock.

Approval of each of the specified compensation that may be paid or become payable to the named executive officers of the Company that is based on or otherwise relates to the merger, on a non-binding, advisory basis (the

 

2

“non-binding named executive officer merger-related compensation proposal”) and the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the merger agreement proposal (the “adjournment proposal”) requires the affirmative vote of the holders of shares of Company common stock represented virtually or by proxy having a majority of the votes entitled to vote thereon.

A vote to abstain will have the same effect as voting against each proposal as to which you abstain.

If you are a holder of record, failure to submit a proxy or to vote via the virtual meeting website will have the same effect as a vote against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.

In the absence of a quorum, the chairman of the meeting or the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided in the Company bylaws.

Recommendation of the Company Board (page 27)

After consideration of various factors, including the factors described in the section entitled “The Merger—Recommendation of the Company Board,” the Company Board unanimously (i) determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by the Company of the merger agreement, the performance by the Company of its covenants and agreements contained therein and the consummation of the merger and the other transactions upon the terms and subject to the conditions contained therein and (iv) recommended that the Company’s stockholders vote to adopt the merger agreement (the “recommendation of the Company Board”).

Accordingly, the Company Board unanimously recommends a vote “FOR” the approval of the merger agreement proposal. The failure to vote your shares, or to provide instructions to your broker, bank or other nominee as to how to vote your shares, will have the same effect as a vote against the merger agreement proposal. Additionally, the Company Board unanimously recommends a vote “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.

Interests of the Company’s Directors and Executive Officers in the Merger (page 51)

In considering the recommendation of the Company Board, you should be aware that some of the Company’s directors and executive officers may have interests in the merger that are different from, or in addition to, your interests as a stockholder. These interests include, among others:

 

•

the accelerated vesting and cash settlement of unvested Company RSU Awards for the merger consideration;

 

•

with respect to certain executive officers and other key employees, the opportunity to receive cash severance payments and benefits;

 

•

continued indemnification and directors’ and officers’ liability insurance applicable for a period of six years following completion of the merger.

The Company Board was aware of these interests and considered them, among other matters, prior to making its determination to recommend the adoption and approval of the merger agreement to the Company’s stockholders. For more information, see the section entitled “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger.”

 

3

Opinion of Evercore Group L.L.C. (page 31 and Annex B)

The Company retained Evercore Group L.L.C. (“Evercore”) to act as its lead financial advisor in connection with the merger. As part of this engagement, the Company requested that Evercore evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of Company common stock in the merger, other than Vulcan and its affiliates. At a meeting of the Company Board held on June 6, 2021, Evercore rendered to the Company Board its opinion to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $74.00 per share in cash to be received by the holders of Company common stock in the merger was fair, from a financial point of view, to such holders, other than Vulcan and its affiliates.

The full text of the written opinion of Evercore, dated June 6, 2021, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. The Company encourages you to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Company Board (in its capacity as such) in connection with its evaluation of the proposed merger. The opinion does not constitute a recommendation to the Company Board or to any other persons in respect of the merger, including as to how any holder of shares of Company common stock should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to the Company, nor does it address the underlying business decision of the Company to engage in the merger.

Opinion of BNP Paribas Securities Corp. (page 40 and Annex C)

The Company retained BNP Paribas Securities Corp. (“BNP Paribas”) to act as its financial advisor in connection with the merger. As part of this engagement, the Company requested that BNP Paribas evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of Company common stock. At the meeting of the Company Board on June 6, 2021, BNP Paribas rendered to the Company Board its oral opinion, subsequently confirmed by delivery of a written opinion dated June 6, 2021, that, based on and subject to the assumptions, limitations, qualifications, and other conditions set forth in such opinion, as of such date, the merger consideration was fair, from a financial point of view, to the holders of shares of Company common stock entitled to receive such merger consideration.

The full text of the written opinion of BNP Paribas, dated June 6, 2021, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached as Annex C to this proxy statement with the permission of BNP Paribas and is incorporated by reference into this proxy statement. The Company encourages you to read this opinion carefully and in its entirety. BNP Paribas’s opinion was addressed to, and provided for the information and benefit of, the Company Board (in its capacity as such) in connection with its evaluation of the proposed merger. The opinion does not constitute a recommendation to the Company Board or to any other persons in respect of the merger, including as to how any holder of shares of Company common stock should vote or act in respect of the merger. BNP Paribas’s opinion does not address the relative merits of the merger as compared to other business or financial strategies, or business combination transactions, that might be available to the Company, nor does it address the underlying business decision of the Company to engage in the merger.

For a description of the opinions that the Company Board received from each of the financial advisors, see the section entitled “The Merger—Opinions of the Financial Advisors to the Company.”

Certain U.S. Federal Income Tax Consequences of the Merger (page 54)

The exchange of Company common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined in “The Merger—Certain U.S. Federal

 

4

Income Tax Consequences of the Merger”) of Company common stock who exchanges shares of Company common stock for cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.

This proxy statement contains a general discussion of certain U.S. federal income tax consequences of the merger. This description does not address any non-U.S. tax consequences, nor does it address state, local or other tax consequences or the consequences to holders who are subject to special treatment under U.S. federal tax law. Consequently, you should consult your tax advisor to determine the particular tax consequences to you of the merger.

Non Solicitation Covenant (page 66)

In the merger agreement, the Company has agreed that neither it, the Company Board (including any committee thereof), the Company’s officers nor any of its subsidiaries will, and that it will cause its and their respective representatives not to, (i) solicit, initiate, knowingly encourage or knowingly facilitate any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer which constitutes or could be reasonably expected to lead to an acquisition proposal (as defined in “The Merger Agreement—Non-Solicitation Covenant”) or (ii) participate in any discussions or negotiations regarding or furnish to any person or entity any information relating to the Company or any Company subsidiary in each case, in connection with, an acquisition proposal, other than to state that the Company and its representatives are prohibited hereunder from engaging in any discussions or negotiations. However, the merger agreement allows the Company to furnish information and participate in unsolicited discussions or negotiations under certain circumstances prior to obtaining the requisite approval of the Company’s stockholders.

In the merger agreement, the Company has also agreed that the Company Board (and any committee thereof) will not (i) adopt, approve, publicly endorse or publicly recommend or publicly propose to adopt, approve, endorse or recommend, any acquisition proposal, (ii) withdraw, change, amend, modify or qualify, or otherwise publicly propose to withdraw, change, amend, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation (as defined in “The Merger Agreement—Proxy Statement, Board Recommendation and U.S. Concrete Stockholders’ Meeting”), (iii) if an acquisition proposal has been publicly disclosed, fail to publicly recommend against any such acquisition proposal within 10 business days after Parent’s written request that the Company or the Company Board do so (or subsequently withdraw, change, amend, modify or qualify (or publicly propose to do so), in a manner adverse to Parent, such rejection of such acquisition proposal) and reaffirm the Company Board Recommendation within such 10-business day period (or, with respect to any acquisition proposals or material amendments, revisions or changes to the terms of any such previously publicly disclosed acquisition proposal that are publicly disclosed within the last 10 days prior to the then-scheduled Company stockholders meeting, fail to take the actions referred to in this clause (iii), with references to the applicable 10-business day period being replaced with three business days), (iv) fail to include the Company Board Recommendation in this proxy statement, (v) approve or authorize, or cause or permit the Company or any Company subsidiary to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document relating to, or any other agreement or commitment providing for, any acquisition proposal or (vi) commit or agree to do any of the foregoing.

However, at any time prior to obtaining stockholder approval, the Company Board may make a change of recommendation in response to an intervening event (as defined in “The Merger Agreement—Changes in Board Recommendation”), if the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law.

In addition, at any time prior to obtaining stockholder approval, the Company Board, may make a change of recommendation or cause the Company to terminate the merger agreement (pursuant to and in accordance with

 

5

the terms thereof) in order to enter into a definitive agreement providing for an acquisition proposal that did not result from a material breach of the non-solicitation restrictions and that the Company Board determines in good faith after consultation with the Company’s outside legal counsel and financial advisors is a superior proposal (as defined in “The Merger Agreement—No Solicitation; Recommendations of the Merger”), but only if, in each case, the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law.

The Company must comply with certain provisions of the merger agreement related to Parent (including with respect to notifying Parent and negotiating with Parent) before making an adverse recommendation change or terminating the merger agreement. Upon termination of the merger agreement under specified circumstances, the Company will be required to pay Parent a termination fee of $50 million.

Conditions to Completion of the Merger (page 74)

The consummation of the merger is subject to, among other things, the following conditions:

 

•

the adoption of the merger agreement at the special meeting by the holders of at least a majority of the outstanding shares of Company common stock;

 

•

the absence of a law or injunction restraining, enjoining or otherwise prohibiting the consummation of the merger;

 

•

the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”);

 

•

each party’s respective representations and warranties in the merger agreement being true and correct as of the closing date, or with respect to certain representations and warranties, as of a time otherwise specified, in the manner described in “The Merger Agreement—Conditions of the Merger” subject to certain materiality and material adverse effect qualifiers;

 

•

each party’s performance in all material respects of its obligations required to be performed under the merger agreement prior to the effective time of the merger; and

 

•

the absence of any, with respect to the Company, material adverse effect, in the manner described in “The Merger Agreement—Representations and Warranties.”

Financing (page 73)

The merger agreement does not contain any financing-related closing condition, and Parent has represented that it and merger sub will have at the effective time sufficient funds to consummate the transactions contemplated by the merger agreement and to make all cash payments contemplated under the merger agreement in connection with the merger and the other transactions, including payment of all related fees and expenses.

Regulatory Approvals (page 56)

Under the terms of the merger agreement, the merger cannot be consummated until the applicable waiting period (and any extension thereof) under the HSR Act has expired or been terminated.

Under the HSR Act and the rules promulgated thereunder by the Federal Trade Commission (the “FTC”), the merger cannot be consummated until each of the Company and Parent files a notification and report form with the FTC and the Antitrust Division of the Department of Justice (“DOJ”) under the HSR Act and the applicable waiting period has expired or been terminated. Each of the Company and Parent filed such a notification and report form on June 21, 2021.

If the FTC or DOJ issues a request for additional information and documents (which we refer to as the “Second Request”) prior to the expiration of the initial waiting period, the parties must observe a second 30-day waiting

 

6

period, which would begin to run only after both parties have substantially complied with the Second Request, unless the waiting period is terminated earlier or the parties otherwise agree to extend the waiting period.

At any time before or after consummation of the merger, notwithstanding the termination of the waiting period under the HSR Act, the Antitrust Division of the DOJ or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, or part of it, seeking divestiture of substantial assets of the Company or Parent, requiring the Company or Parent to license, or hold separate, assets or terminating existing relationships and contractual rights. In addition, state attorneys general and other regulators could take action under the antitrust or other laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the applicable laws under some circumstances. There can be no assurance that a challenge to the merger will not be made or, if such a challenge were made, that it would not be successful.

Termination of the Merger Agreement (page 75)

The merger agreement may be terminated, and the merger may be abandoned at any time prior to the effective time:

 

•

by mutual written consent of Parent and the Company;

 

•

by either Parent or the Company, if:

 

•

the merger has not been consummated by March 6, 2022 (which we refer to as the “outside date”); however, (i) if, on the outside date, all of the conditions to the merger (other than those conditions relating to antitrust approvals or no injunction (to the extent the relevant injunction or order is in respect of, or any such law is, the HSR Act or any other antitrust law) and those conditions that by their nature are to be satisfied or waived on the closing date of the merger (if such conditions would be satisfied or validly waived were the closing of the merger to occur at such time)) shall have been satisfied or waived, then the outside date shall automatically be extended until June 6, 2022, and (ii) this right to terminate will not be available to any party whose action or failure to fulfill any obligation was a proximate cause of the failure of the effective time of the merger to occur prior to the outside date and such action or failure to act constitutes a material breach of the merger agreement;

 

•

any governmental entity of competent jurisdiction has issued a final, non-appealable order, injunction, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the merger; or

 

•

the special meeting (including any adjournments or postponements thereof) has concluded and the Company stockholders have not adopted the merger agreement;

 

•

by the Company:

 

•

if Parent and/or merger sub has breached or failed to perform or violated their respective covenants or agreements under the merger agreement or any of the representations and warranties of Parent or merger sub set forth in the merger agreement has become inaccurate, and such breach, failure to perform, violation or inaccuracy would result in the failure of the related conditions to the Company’s obligation to close the merger to be satisfied and is not capable of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from the Company of such breach, failure to perform, violation or inaccuracy, except the Company will not have the right to effect such termination if it is then in material breach of the merger agreement; or

 

•

prior to receipt of the stockholder approval, in order to enter into a definitive agreement providing for a superior proposal (as defined in “The Merger Agreement—Non-Solicitation Covenant”) so

 

7

long as the Company has complied with its obligations under the non-solicitation covenant in the merger agreement from and immediately prior to or substantially concurrently with (and as a condition to) the termination of this Agreement, the Company pays to Parent the $50,000,000 termination fee described below.

 

•

by Parent:

 

•

if the Company has breached or failed to perform or violated its covenants or agreements under the merger agreement or any of the representations and warranties of the Company set forth in the merger agreement shall have become inaccurate, and such breach, failure to perform, violation or inaccuracy would result in the failure of the related conditions to Parent’s obligation to close the merger to be satisfied and is not capable of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from Parent of such breach, failure to perform, violation or inaccuracy, except Parent will not have the right to effect such termination if it is then in material breach of the merger agreement; or

 

•

if, prior to the Company stockholder approval, the Company Board has effected a change of recommendation.

Termination Fee Payable by the Company; Termination Fee Payable by Parent (page 77)

If the merger agreement is terminated under certain circumstances:

 

•

the Company may be obligated to pay Parent a termination fee of $50 million, or

 

•

Parent may be obligated to pay the Company a termination fee of $50 million.

Effect of Termination (page 78)

Each of the parties to the merger agreement is entitled to specific performance of the terms of the merger agreement, in addition to any other remedy at law or equity.

Litigation Related to the Merger (page 56)

As of the date of this proxy statement, no stockholder litigation related to the merger agreement has been brought against the Company or any members of the Company Board.

Appraisal Rights (page 86)

Under the DGCL, a holder of record of Company common stock who does not vote in favor of the merger agreement proposal will have the right to seek appraisal of the fair value of its shares of Company common stock as determined by the Court of Chancery of the State of Delaware if the merger is completed, but only if such stockholder complies with all requirements of the DGCL for exercising appraisal rights, including Section 262 of the DGCL. This appraisal amount could be more than, the same as or less than the merger consideration. Any holder of record of the Company common stock intending to exercise appraisal rights must, among other things, submit a written demand for an appraisal to us prior to the vote on the merger agreement proposal at the special meeting and must not vote or otherwise submit a proxy in favor of the merger agreement proposal. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. The requirements of the DGCL for exercising appraisal rights are summarized in this proxy statement, including Section 262 of the DGCL, the text of which can be found in Annex D to this proxy statement.

Market Price and Dividend Data (page 84)

The closing trading price of a share of Company common stock on Nasdaq (“Nasdaq”) on June 4, 2021, the last trading day before the merger agreement was approved by the Company Board, was $57.14 per share. On

 

8

June 30, 2021, which is the latest practicable trading day before this proxy statement was printed, the closing price of a share of Company common stock on Nasdaq was $73.80. You are encouraged to obtain current market quotations for the Company common stock in connection with voting your shares of Company common stock.

Where You Can Find More Information (page 91)

You can find more information about the Company in the periodic reports and other information we file with the U.S. Securities and Exchange Commission (the “SEC”). The information is available at the website maintained by the SEC at www.sec.gov. See “Where You Can Find More Information.”

 

9

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND MERGER

 

Q:	Why am I receiving this proxy statement?

 

A:

You are receiving this proxy statement because on June 6, 2021 the Company entered into the merger agreement with Parent and merger sub. You are receiving this proxy statement in connection with the solicitation of proxies by the Company Board in favor of the merger agreement proposal. The merger agreement is attached as Annex A to this proxy statement. The description of the merger agreement in this proxy statement is not complete and is qualified in its entirety by reference to the complete text of the merger agreement.

 

Q:	What will the Company’s stockholders receive in the merger?

 

A:

If the merger is consummated, each holder of Company common stock will receive the merger consideration of $74.00 in cash, without interest, less any applicable withholding taxes, for each share of the Company common stock that such stockholder owns immediately prior to the time the merger becomes effective (the “effective time”), unless such stockholder exercises and perfects its appraisal rights under the DGCL.

 

Q:	When and where is the special meeting?

 

A:

The special meeting of Company stockholders will be held via live webcast on [•], at [•]. The special meeting can be accessed by visiting www.proxydocs.com/USCR, where you will be able to listen to the meeting live and vote online. You will need your control number, provided on your proxy card, to join the special meeting. We encourage you to allow ample time for online check-in, which will open at [•]. Please note that you will not be able to attend the virtual special meeting in person.

 

Q:	Who is eligible to vote?

 

A:	Holders of record of the Company common stock as of the close of business on [•], 2021, the record date established by the Company Board for the special meeting, are eligible to vote.

 

Q:	How many votes do the Company’s stockholders have?

 

A:	Holders of the Company common stock are entitled to one vote for each share of the Company common stock that such holder owned at the close of business on [•], 2021, the record date for the special meeting.

 

Q:	What vote of the Company’s stockholders is required to approve the merger agreement proposal?

 

A:	Approval of the merger agreement proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock. Failures to vote, abstentions and broker non-votes will have the same effect as a vote against the merger agreement proposal.

 

Q:	What vote of the Company’s stockholders is required to approve the other proposals to be considered at the special meeting?

 

A:

Approval of each of the binding named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of shares of Company common stock represented virtually or by proxy having a majority of the votes entitled to vote thereon. Abstentions have the same effect as a vote against either proposal, but broker non-votes will not affect the outcome of either proposal.

 

Q:	How does the Company Board recommend that I vote?

 

A:

After consideration of various factors, including the factors described in the section entitled “The Merger—Recommendation of the Company Board and Reasons for the Merger,” the Company Board unanimously (i) determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it

 

10

is in the best interests of the Company and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by the Company of the merger agreement, the performance by the Company of its covenants and agreements contained therein and the consummation of the merger and the other transactions upon the terms and subject to the conditions contained therein and (iv) recommended that the Company’s stockholders vote to adopt the merger agreement. Accordingly, the Company Board unanimously recommends a vote “FOR” the approval of the merger agreement proposal. Additionally, the Company Board unanimously recommends a vote “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.

You should be aware that some of the Company’s directors and executive officers are subject to plans, agreements or arrangements that may provide them with interests in the merger that are different from, or are in addition to, the interests of the Company’s stockholders generally. These interests relate to equity securities held by such persons and their affiliates; change of control severance covering the Company’s executive officers; and indemnification of the Company’s directors and officers by the surviving company following the merger. See the section entitled “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger.”

 

Q:	What do I need to do now?

 

A:

Please read this proxy statement carefully in its entirety, including its annexes and the documents referred to or incorporated by reference herein, to consider how the merger would affect you. After you read these materials, you should complete, sign and date your proxy or voting instruction card and mail it in the enclosed return envelope or submit your vote over the telephone or the Internet as soon as possible so that your shares can be voted at the special meeting. If you are a stockholder of record and you sign, date and mail your proxy card or otherwise submit your proxy without indicating how you wish to vote, your shares will be voted in accordance with the recommendations of the Company Board, as applicable, with respect to each proposal.

 

Q:	Do I need to attend the special meeting virtually?

 

A:

No. It is not necessary for you to attend the special meeting virtually in order to vote your Company common stock. If you are a stockholder of record as of the record date, you may vote by mail, by telephone or through the Internet, as described in more detail below. If you are a “street name” holder of Company common stock, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee for your shares of Company common stock to be voted at the special meeting, as described in more detail below.

 

Q:	How do I vote?

 

A:	If you are a stockholder of record, you may vote:

 

•

by proxy by returning the enclosed proxy card in the enclosed return envelope;

 

•

by proxy over the telephone using the telephone number printed on each proxy card you receive;

 

•

by proxy through the Internet voting instructions printed on each proxy card you receive; or

 

•

by casting your vote at the special meeting via the virtual meeting website. Any stockholder of record can attend the special meeting by visiting www.proxydocs.com/USCR, where stockholders will be able to listen to the meeting live and vote online. The special meeting starts at [•]. We encourage you to allow ample time for online check-in, which will open at [•]. You will need your control number, found on your proxy card, to join the special meeting. Instructions on who can attend and participate via Internet, including how to demonstrate proof of stock ownership, will be posted at [•].

Whether or not you plan to attend the virtual special meeting, the Company urges you to vote by proxy to ensure your vote is counted. You may still attend the virtual special meeting and vote online by ballot even if you have already voted by proxy.

 

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If you are submitting your proxy by telephone or through the Internet, your voting instructions must be received by 11:59 p.m., Eastern Time, on the day before the special meeting.

If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares of Company common stock will be voted “FOR” the approval of the merger agreement proposal, “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.

If your shares of Company common stock are held in “street name” by your broker, bank or other nominee, you should have received a voting instruction card with these proxy materials from that organization rather than a proxy card from the Company. Your broker, bank or other nominee will vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares by following the procedures provided by your broker. See “The Special Meeting of the Company’s Stockholders—How to Vote.”

 

Q:	If my shares are held for me by a bank, broker, trust or other nominee, will my bank, broker, trust or other nominee vote those shares for me with respect to the proposals?

 

A:

Your bank, broker, trust or other nominee will NOT have the power to vote your shares of Company common stock at the special meeting unless you provide instructions to your bank, broker, trust or other nominee on how to vote. You should instruct your bank, broker, trust or other nominee on how to vote your shares of Company common stock with respect to the proposals, using the instructions provided by your bank, broker, trust or other nominee. You may be able to vote by telephone or through the Internet if your bank, broker, trust or other nominee offers these options.

 

Q:	What happens if I do not return a proxy card, voting instruction card or otherwise vote or vote to abstain?

 

A:

If you are a holder of record, the failure to return your proxy card or to otherwise vote will have the same effect as voting against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.

If your shares are held in “street name” and you do not return your voting instruction card or otherwise instruct your broker, bank or other nominee how to vote your shares, it will have the same effect as a vote against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.

A vote to abstain will have the same effect as voting against each proposal as to which you abstain.

See “The Special Meeting of the Company’s Stockholders—Votes Required; Treatment of Abstentions and Broker Non-Votes.”

 

Q:	What does it mean if I receive more than one set of materials?

 

A:

This means you own shares of Company common stock that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must complete, sign, date and return each of the proxy or voting instruction cards that you receive, or vote all of your shares over the telephone or the Internet in accordance with the applicable instructions in order to vote all of the shares you own. Any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, and therefore any shares held in “street name” will not be combined for voting purposes with shares you hold of record. Each set of proxy materials you receive comes with its own prepaid return envelope and control number(s); if you vote by mail, make sure you return each proxy or voting instruction card in the return envelope that accompanies that proxy or voting instruction card, and if you vote by telephone or over the Internet, use the control number(s) on each proxy or voting instruction card, as applicable.

 

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Q:	Why am I being asked to consider and vote on the non-binding named executive officer merger-related compensation proposal?

 

A:

SEC rules require the Company to seek approval on a non-binding, advisory basis with respect to certain payments that will or may be made to the Company’s named executive officers in connection with the merger. Approval of the non-binding named executive officer merger-related compensation proposal is not required to complete the merger.

 

Q:	What happens if I sell my shares of Company common stock before the special meeting?

 

A:

The record date for the special meeting is earlier than the expected date of the merger. If you own shares of Company common stock as of the close of business on the record date but transfer your shares prior to the date of the special meeting, you will retain your right to vote at the special meeting, but the right to receive the merger consideration will pass to the person who holds your shares immediately prior to the effective time of the merger.

 

Q:	Am I entitled to appraisal rights?

 

A:	Yes. Under Section 262 of the DGCL, a stockholder will be entitled to dissent and to seek appraisal for its shares only if certain criteria are satisfied. See the section entitled “Appraisal Rights” and Annex D of this proxy statement.

 

Q:	Will I be subject to U.S. federal income tax upon the exchange of Company common stock for cash pursuant to the merger?

 

A:

The exchange of Company common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder of Company common stock who exchanges shares of Company common stock for cash in the merger generally will recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.

For a more detailed description of certain U.S. federal income tax consequences of the merger, see “The Merger—Certain U.S. Federal Income Tax Consequences of the Merger” beginning on page 54.

This proxy statement contains a general discussion of certain U.S. federal income tax consequences of the merger. This description does not address any non-U.S. tax consequences, nor does it address state, local or other tax consequences or the consequences to holders who are subject to special treatment under U.S. federal tax law. Consequently, you should consult your tax advisor to determine the particular tax consequences to you of the merger.

 

Q:	When do you expect the merger to be completed?

 

A:

The Company and Parent are working to be in a position to complete the merger as quickly as possible after the special meeting. As of the date of this proxy statement, the Company anticipates that the merger will be completed in the second half of calendar year 2021. In order to complete the merger, we must obtain the required stockholder approval, approval under the HSR Act and a number of other closing conditions under the merger agreement must be satisfied or waived. See “The Merger Agreement—Conditions of the Merger.”

 

Q:	What happens if the merger is not completed?

 

A:

In the event that the merger agreement proposal does not receive the required approvals of the stockholders described elsewhere in this proxy statement, or if the merger is not completed for any other reason, the Company’s stockholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company expects that its management will operate the Company’s business in a manner similar to that in which it is being operated today, and the Company will remain an independent public company, the Company common stock will continue to be listed and traded on Nasdaq,

 

13

the Company common stock will continue to be registered under the Exchange Act, and the Company’s stockholders will continue to own their shares of the Company common stock and will continue to be subject to the same general risks and opportunities as they currently are with respect to ownership of the Company common stock. Under certain circumstances, if the merger is not completed, the Company may be obligated to pay to Parent a termination fee.

 

Q:	Should I send in my stock certificates now?

 

A:

No. At or about the date of completion of the merger, if you hold certificated shares, you will receive a letter of transmittal with instructions informing you how to send in your stock certificates to Parent’s paying agent in order to receive the merger consideration. You should use the letter of transmittal to exchange stock certificates for the merger consideration to which you are entitled as a result of the merger. PLEASE DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY OR OTHERWISE SEND THEM TO THE COMPANY, PARENT OR THE PROXY SOLICITATION AGENT.

If you are a beneficial owner of shares of Company common stock, you will receive instructions from your broker, bank or other nominee as to how to surrender your shares and receive the merger consideration for those shares following the completion of the merger.

 

Q:	Who can help answer my questions?

 

A:

The information provided above in the Q&A format is for your convenience only and is merely a summary of some of the information in this proxy statement. You should carefully read the entire proxy statement, including its annexes and the documents referred to or incorporated by reference herein. If you would like additional copies of this proxy statement, without charge, or if you have questions about the merger, including the procedures for voting your shares, you should contact the Company’s proxy solicitation agent:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

(800) 322-2885

Banks and Brokers: (212) 929-5500

Email: proxy@mackenziepartners.com

You may also wish to consult your legal, tax and/or financial advisors with respect to any aspect of the merger, the merger agreement or other matters discussed in this proxy statement.

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement and the documents incorporated into it by reference contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Company including, but not limited to, statements related to the proposed acquisition of the Company and the anticipated timing, results and benefits thereof; statements regarding the expectations and beliefs of the Company Board and management and other statements that are not historical facts. You can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are based on each of the companies’ current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties, many of which are beyond the Company’s control. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with the Company’s ability to complete the merger on the proposed terms or on the anticipated timeline, or at all, including:

 

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risks and uncertainties related to securing the necessary regulatory and stockholder approvals and the satisfaction of other closing conditions to consummate the merger;

 

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the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

 

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risks related to diverting the attention of Company management from ongoing business operations;

 

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risk that the proposed merger disrupts the Company’s current operations;

 

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significant transaction costs and/or unknown or inestimable liabilities;

 

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the risk of stockholder litigation in connection with the merger, including resulting expense or delay;

 

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Vulcan’s ability to obtain the expected financing to consummate the merger;

 

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disruption from the proposed transaction, making it more difficult to conduct business as usual or maintain relationships with customers, employees, suppliers or other third parties;

 

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effects relating to the announcement of the merger or any further announcements or the consummation of the merger on the market price of the Company’s common stock;

 

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the effect of the announcement or pendency of the merger on the Company’s ability to retain and hire key personnel and other employees or the Company’s business relationships (including customers and suppliers), operating results and business generally;

 

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limitations placed on the Company’s ability to operate its business under the merger agreement;

 

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the occurrence of any event that could give rise to the termination of the merger agreement, including under circumstances that require the Company to pay Parent a termination fee;

 

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regulatory initiatives and changes in tax laws;

 

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the impact of the COVID-19 pandemic on the operations and financial results of the Company;

 

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market volatility;

 

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the financial performance of the Company through the completion of the merger;

 

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general economic conditions; and

 

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other risks and uncertainties affecting the Company, including those described from time to time under the caption “Risk Factors” and elsewhere in the Company’s filings and reports, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and future filings and reports by either company.

 

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All of the forward-looking statements in this proxy statement are qualified by the information contained or incorporated by reference into this proxy statement. See the section entitled “Where You Can Find More Information” beginning on page 91 of this proxy statement.

Moreover, other risks and uncertainties of which the Company is not currently aware may also affect its forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The Company cautions investors that such forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such forward-looking statements.

The forward-looking statements in this proxy statement are made only as of the date hereof or as of the dates indicated in the forward-looking statements and reflect the views stated therein with respect to future events as at such dates, even if they are subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.

 

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THE PARTIES TO THE MERGER

U.S. Concrete, Inc.

The Company is a leading manufacturer of concrete, heavy construction aggregates and solutions, with manufacturing facilities and sales efforts concentrated in the United States. The Company’s executive offices are located at 331 N. Main Street, Euless, Texas 76039. The Company’s telephone number is (817) 835-4105. For additional information about the Company, see “Where You Can Find More Information” or visit Company’s website at https://www.us-concrete.com. The information provided on the Company’s website is not part of this proxy statement and is not incorporated by reference in this proxy statement.

Vulcan Materials Company

Vulcan Materials Company, a New Jersey corporation, which we refer to as Parent, is a producer, distributor and seller of construction aggregates in North America. Parent’s principal executive offices are located at 1200 Urban Center Drive, P.O. Box 385014, Birmingham, Alabama, 35242-5014. Parent’s telephone number is (205) 298-3000. Parent’s website address is https://www.vulcanmaterials.com. The information provided on Parent’s website is not part of this proxy statement and is not incorporated by reference in this proxy statement.

Grizzly Merger Sub I, Inc.

Grizzly Merger Sub I, Inc., which we refer to as merger sub, is a wholly owned subsidiary of Parent, whose principal executive offices are located at 1200 Urban Center Drive, P.O. Box 385014, Birmingham, Alabama 35242-5014. Merger sub’s telephone number is (205) 298-3000. Merger sub was formed solely for the purpose of facilitating Parent’s acquisition of the Company.

 

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THE SPECIAL MEETING OF THE COMPANY’S STOCKHOLDERS

We are furnishing this proxy statement as part of the solicitation of proxies by the Company Board for use at the special meeting and at any properly convened meeting following an adjournment or postponement of the special meeting.

Time, Place and Purpose of the Special Meeting

The Company will hold the special meeting via live webcast on [•], at [•]. The special meeting can be accessed by visiting www.proxydocs.com/USCR, where you will be able to listen to the meeting live and vote online. We encourage you to allow ample time for online check-in, which will open at [•]. Please note that you will not be able to attend the virtual special meeting in person. The purpose of the special meeting is to consider and vote on the merger agreement proposal, the non-binding named executive officer merger-related compensation proposal and the adjournment proposal.

Who Can Vote at the Special Meeting

Only holders of record of the Company common stock, as of the close of business on [•], which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. If you own shares that are registered in the name of someone else, such as a broker, bank or other nominee, you need to direct that person how to vote those shares or obtain an authorization from them and vote the shares yourself at the special meeting. As of the close of business on the record date, there were [•] shares of Company common stock outstanding.

Quorum for the Special Meeting

To conduct any business at the special meeting, a quorum must be present virtually or by proxies. The holders of a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, represented virtually or by proxy, will constitute a quorum for the transaction of business at the special meeting. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. As of the close of business on the record date, there were [•] shares of the Company common stock outstanding. Accordingly, [•] shares of the Company common stock must be represented virtually or by proxy at the special meeting to constitute a quorum.

If you are a Company stockholder of record and you vote by mail, by telephone or through the Internet or at the special meeting via the virtual meeting website, then your shares of Company common stock will be counted as part of the quorum. If you are a “street name” holder of shares of Company common stock and you provide your bank, broker, trust or other nominee with voting instructions, then your shares of Company common stock will be counted in determining the presence of a quorum. If you are a “street name” holder of shares of Company common stock and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares of Company common stock will not be counted in determining the presence of a quorum.

Once a share of Company common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum and any adjournment of the special meeting, unless the holder is present solely to object to the special meeting. However, if a new record date is set for an adjourned meeting, a new quorum will have to be established.

Votes Required; Treatment of Abstentions and Broker Non-Votes

Approval of the merger agreement proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company common stock.

Approval of each of the binding named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of shares of Company common stock represented virtually or by proxy having a majority of the votes entitled to vote thereon.

 

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A vote to abstain will have the same effect as voting against each proposal as to which you abstain.

If you are a holder of record, failure to submit a proxy or to vote via the virtual meeting website will have the same effect as a vote against the merger agreement proposal, but it will have no effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.

If your shares of Company common stock are held in “street name” by your broker, you should instruct your broker how to vote your shares using the enclosed voting instruction card provided by your broker. Under applicable regulations, brokers, banks and other nominees who hold shares in “street name” for customers may not exercise their voting discretion with respect to non-routine matters such as the proposals to be voted upon at the special meeting. As a result, if you do not instruct your broker, bank or other nominee how to vote your shares of Company common stock, your shares will be treated as “broker non-votes” and will not be voted, which will have the same effect as voting against the merger agreement proposal. Broker non-votes will not, however, have any effect on the non-binding named executive officer merger-related compensation proposal or the adjournment proposal.

How to Vote

Stockholders have a choice of voting by proxy by completing a proxy card and mailing it in the prepaid envelope provided, by calling a toll-free telephone number or through the Internet. Please refer to your proxy card or the information forwarded by your bank, broker, trust or other nominee to see which options are available to you. The telephone and Internet voting facilities for stockholders of record will close at 11:59 p.m., Eastern Time on the day before the special meeting.

If you are a holder of record and sign and return a proxy card but do not include “FOR,” “AGAINST” or “ABSTAIN” on a proposal to be voted, your shares of Company common stock will be voted in favor of that proposal.

If you wish to vote by proxy and your shares of common stock are held by a bank, broker, trust or other nominee, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of Company common stock, your bank, broker, trust or other nominee will not be able to vote your shares on the proposals.

The stockholders of record as of the close of business on the record date for the special meeting, their duly appointed proxy holders, and the “street name” stockholders who beneficially owned shares of Company common stock as of the close of business on the record date are entitled to participate in the virtual meeting and will need their assigned control number to vote shares virtually at the special meeting. The control number can be found on your proxy card. If your shares are held in the name of a bank, broker or other nominee and you do not have the assigned control number, please follow the instructions on the voting instruction card, or other applicable proxy notices, furnished by your bank, broker or other nominee to vote your shares accordingly or contact your bank, broker or other nominee for instructions. If your shares are held in the name of a bank, broker or other nominee, in order to vote online at the virtual special meeting, you must first obtain a valid legal proxy from your broker, bank or other nominee and then register in advance to attend and vote at the special meeting.

If you have any questions about how to vote or direct a vote in respect of your shares of Company common stock, you may contact our proxy solicitor, MacKenzie Partners, toll-free at (800) 322-2885 for stockholders or (212) 929-5500 for banks and brokers.

YOU SHOULD NOT SEND IN YOUR SHARE CERTIFICATE(S) WITH YOUR PROXY CARD. A letter of transmittal with instructions for the surrender of certificates representing shares or book-entry shares will be mailed to stockholders if the merger is consummated.

 

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Revocation of Proxies

Any proxy given by a Company stockholder may be revoked at any time before it is voted at the special meeting by doing any of the following:

 

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submitting another proxy by telephone or through the Internet, in accordance with the instructions on the proxy card;

 

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delivering a signed written notice of revocation bearing a date later than the date of the proxy to the Company’s Corporate Secretary at U.S. Concrete, Inc., 331 N. Main Street, Euless, Texas 76039 stating that the proxy is revoked;

 

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submitting a later-dated proxy card relating to the same shares of Company common stock; or

 

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attending the special meeting via the virtual meeting website and voting at the meeting (your attendance at the special meeting will not, by itself, revoke your proxy; you must vote at the special meeting via the virtual meeting website).

“Street name” holders of shares of Company common stock should contact their bank, broker, trust or other nominee to obtain instructions as to how to revoke or change their proxies.

Adjournments

Although it is not currently expected, the special meeting may be adjourned one or more times in accordance with the merger agreement to a later day or time if necessary or appropriate, including to solicit additional proxies in favor of the merger agreement proposal. Your shares will be voted on any adjournment proposal in accordance with the instructions indicated in your proxy or voting instruction card. If a quorum is not present, the person presiding at the special meeting or the stockholders holding a majority of the Company common stock represented virtually or by proxy at the special meeting and entitled to vote thereat may adjourn the special meeting in accordance with the merger agreement until a quorum shall be present. If the adjournment is for more than 60 days after the date of this proxy statement, or if a new record date is set for the adjourned meeting, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting. In addition, the special meeting could be postponed before it commences, subject to the terms of the merger agreement. If the special meeting is adjourned or postponed, stockholders who have already submitted their proxies or voting instructions will be able to revoke them at any time prior to the final vote on the proposals. If you are a holder of record and return a proxy without indicating how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal.

Householding

Certain stockholders of the Company who share an address are being delivered only one copy of this proxy statement unless the Company or one of its mailing agents has received contrary instructions.

Upon the written request of a stockholder of the Company at a shared address to which a single copy of this proxy statement was delivered, the Company will promptly deliver a separate copy of such document to the requesting stockholder. Written requests can be addressed to U.S. Concrete, Inc., Attn: Corporate Secretary, 331 N. Main Street, Euless, Texas 76039 or emailed to corporatesecretary@us-concrete.com. Stockholders may also call the Company at (817) 835-4105. The stockholders of the Company sharing an address who are receiving multiple copies of these proxy materials or the Company’s notice of Internet availability of proxy materials and/or proxy statements and annual reports may request delivery of a single copy of such documents by emailing the Company at the address above.

Solicitation of Proxies

The Company is soliciting the enclosed proxy card on behalf of the Company Board, and the Company will bear the expenses in connection with the solicitation of proxies. In addition to solicitation by mail, the Company and

 

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its directors, officers and employees may solicit proxies in person, by telephone or by electronic means. These persons will not be specifically compensated for doing this.

The Company has engaged MacKenzie Partners, Inc. (“MacKenzie”) to assist in the solicitation of proxies for the special meeting and will pay MacKenzie a fee of approximately $25,000, plus reimbursement of out-of-pocket expenses. The address of Mackenzie Partners is 1407 Broadway, 27th Floor, New York, NY 10018. You can call MacKenzie Partners toll-free at (800) 322-2885 or collect at (212) 929-5500.

Recommendation of the Company Board

After consideration of various factors, including the factors described in the section entitled “The Merger—Recommendation of the Company Board and Reasons for the Merger,” the Company Board unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of, the Company and its stockholders, (ii) authorized and approved the merger agreement and the other transactions contemplated by the merger agreement, including the merger, and directed the senior officers of the Company to execute and deliver the merger agreement, (iii) directed that the merger agreement and the transactions contemplated thereby, including the merger, be submitted to the Company’s stockholders for adoption at the special meeting in accordance with the merger agreement and (iv) recommended that the Company’s stockholders vote in favor of the adoption and approval of the merger agreement and the transactions contemplated thereby, including the merger.

Accordingly, the Company Board unanimously recommends a vote “FOR” the approval of the merger agreement proposal. Additionally, the Company Board unanimously recommends a vote “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.

Questions and Additional Information

If you have more questions about the merger, the special meeting or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor:

MacKenzie Partners, Inc.

1407 Broadway

New York, NY 10018

Stockholders May Call:

(800) 322-2885 (toll-free from the U.S. or Canada);

(212) 929-5500 (from other locations)

 

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THE MERGER (PROPOSAL 1)

The discussion of the merger and the merger agreement in this proxy statement is qualified in its entirety by reference to the complete text of the merger agreement, which is attached to this proxy statement as Annex A. You should read the merger agreement carefully in its entirety.

Background of the Merger

The Company is a leading heavy building materials supplier of aggregates and ready-mixed concrete in select geographic markets in the United States, the U.S. Virgin Islands and Canada. As a part of its efforts to strengthen its business and enhance stockholder value, the Company Board and senior management of the Company regularly review and assess the Company’s operations, performance, prospects and strategic landscape in the industry, including the possibility of pursuing various strategic transactions. From time to time, members of the Company Board and the senior management of the Company, with the assistance of legal and financial advisors, review and evaluate potential strategic opportunities and alternatives available to the Company with a view to maximizing stockholder value.

In connection with the COVID-19 pandemic beginning to more directly impact the United States economy in 2020, the Company’s common stock declined from a closing price of $41.25 on January 2, 2020 to an intraday low of $6.75 on March 18, 2020. On March 24, 2020, the Company engaged Evercore to provide financial advisory services in connection with, among other things, potential activism and potential acquisition proposals the Company may receive in light of market conditions and the Company stock price.

On March 26, 2020, the Company Board met with members of senior management and representatives of Evercore and Gibson, Dunn & Crutcher, LLP, which we refer to as Gibson Dunn, in light of the ongoing and further potential impact of COVID-19 on the Company. During the meeting, the Company Board formed a strategic review committee, consisting of independent, disinterested directors Kurt Cellar, Michael Lundin and Colin Sutherland (the “Strategic Review Committee”), to consider strategic alternatives that may be available to the Company. The Company Board empowered the Strategic Review Committee to, among other responsibilities, review, evaluate, consider, investigate, discuss, negotiate and determine the advisability of any strategic alternatives, including to determine not to pursue any or all strategic alternatives, and to recommend what action or actions, if any, should be taken with respect to strategic alternatives, which may include, without limitation, a recommendation to reject any and all strategic alternatives. The Company Board resolved that it would not approve a change of control transaction without a prior favorable recommendation from the Strategic Review Committee. The Company Board resolved that the Strategic Review Committee would be in existence for a period ending upon the earlier of (x) the time the Strategic Review Committee determines its work has been completed and (y) the Company Board’s determination to disband the Strategic Review Committee.

On May 7, 2020, representatives of Evercore reviewed with the Strategic Review Committee materials regarding stockholder activism, hostile activity amidst the COVID-19 pandemic and a preliminary framework for considering strategic options, including standalone execution, non-core dispositions, seeking additional capital to deleverage or pursue additional M&A, growing the aggregates segment, pursuing the sale of the Company’s west region or the Company’s aggregates segment, pursuing joint venture(s) and pursuing the sale of the Company in whole or in parts, whether for cash or stock. Representatives of BNP Paribas also discussed with the Strategic Review Committee materials regarding exploring a potential strategic combination with an industry participant that had not approached the Company to discuss a potential transaction but could be a potential strategic acquiror of the Company.

On August 6, 2020, J. Thomas Hill, Chairman of the Vulcan board of directors and Chief Executive Officer of Vulcan, contacted Ronnie Pruitt, Chief Executive Officer of the Company, to arrange a meeting.

On August 24, 2020, the Company entered into a mutual confidentiality agreement with Vulcan so that both

 

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companies could share confidential information regarding their businesses and to facilitate more in-depth discussions between the parties regarding potential business opportunities. The confidentiality agreement did not contain a standstill obligation.

On August 25, 2020, Mr. Hill, together with Stanley Bass, Chief Strategy Officer of Vulcan and Thompson Baker II, Chief Operating Officer of Vulcan, met with Mr. Pruitt and Brian Mahavier, Vice President, Strategy & Development of the Company. The parties discussed a range of potential business transactions, including potential joint venture transactions and asset-level transactions, but not a change of control transaction.

Mr. Hill and Mr. Pruitt met again in Dallas on September 11, 2020 and October 21, 2020 to discuss potential business transactions but not a change of control transaction.

Between October 21, 2020 and March 19, 2021, Mr. Hill and Mr. Pruitt periodically engaged in discussions, including regarding potential business transactions; however, no proposals regarding a change of control transaction were made. During such time the Company continued to execute on its strategic plan and acquired, among other things, Sugar City Building Materials and Stockton Cement Terminal.

On December 28, 2020, Mr. Pruitt met with Mr. Hill. During such meeting Mr. Hill indicated Vulcan and an industry participant, which we refer to as Party A, were working together to formulate a proposal to acquire all of the outstanding shares of the Company. No proposal was made during such meeting.

On December 31, 2020, the Strategic Review Committee met with representatives of Evercore to discuss the December 28 meeting between Mr. Pruitt and Mr. Hill.

On February 22, 2021, the Company Board held a regularly scheduled telephonic meeting with members of senior management. Mr. Pruitt provided an overview of the 2020 results and a preview of results to date in 2021. Revenue from the ready-mixed concrete segment for the full year 2020 decreased 9.2%, compared to the prior year, and revenue from the ready-mixed concrete segment for the fourth quarter of 2020 decreased 11.4%, compared to the prior year fourth quarter. The Company was also forced to cease operations during winter storms in Texas during the first quarter of 2021.

On March 2, 2021, Mr. Pruitt met with the chief executive officer of an industry participant, which we refer to as Party B, as well as the president of Party B and other members of senior management of Party B to discuss a potential business combination transaction.

On March 9, 2021, the chief executive officer of Party B verbally communicated to Mr. Pruitt that Party B would not be able to acquire the Company at a price per share greater than $67.00. The Company’s closing stock price on March 9, 2021 was $65.87.

On March 19, 2021, Mr. Hill reached out to Mr. Pruitt to arrange a meeting to discuss a potential change of control transaction.

On March 24, 2021, Mr. Pruitt and Michael Lundin, Chairman of the Company Board, met with Mr. Hill and the chief executive officer of Party A. Vulcan and Party A verbally expressed an interest in acquiring all of the outstanding shares of the Company for $69.50 per share, which they believed corresponded to a transaction with a total enterprise value of $1.84 billion. Vulcan and Party A requested a three-to-four week diligence period in connection with their verbal proposal.

On March 27, 2021, the Company Board met with representatives of Gibson Dunn, Evercore and BNP Paribas to discuss the verbal proposal from Vulcan and Party A and to receive a presentation regarding fiduciary duties from Gibson Dunn. Mr. Pruitt also provided an overview of the Company’s Q1 2021 performance to date noting the recent cement shortages in Texas and headwinds as a result of winter weather events. The Company

 

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Board decided to disband the Strategic Review Committee determining that there were no conflicts of interest presented by a potential transaction and that, in that light, it would be preferable to obtain input from each of the directors in connection with a potential change of control transaction. In addition, the exigencies of the COVID-19 pandemic and the impact of the pandemic on the Company’s stock price that led to the formation of the Strategic Review Committee had subsided.

Later on March 27, 2021, after Mr. Pruitt clarified that the Company’s fully diluted shares outstanding was higher than previously assumed by Vulcan and Party A, Mr. Hill agreed to increase the proposal to a total enterprise value for the Company of $1.94 billion (with a per share price of $69.50 for each outstanding share).

On April 1, 2021, the Company Board met with members of senior management and representatives of Gibson Dunn, Evercore and BNP Paribas to further discuss the proposal from Vulcan and Party A and possible responses to the consortium. The Company Board also discussed certain long-term financial projections for the Company’s future long-term financial results that had been prepared by senior management and the key assumptions underlying such projections. Representatives of Evercore and BNP Paribas reviewed with the Company Board their respective preliminary financial analyses of the Company, as well as a list of other potential strategic acquirers of the Company. Following discussions, the Company Board instructed Mr. Pruitt to inform the consortium that the price would need to be higher in order to move forward and that the Company Board would need a written indication of interest that clearly described the proposed transaction in light of the consortium nature of the buyer. Following the meeting, Mr. Pruitt and Mr. Lundin communicated the message to Mr. Hill and the chief executive officer of Party A.

On May 6, 2021, the Company announced results for the fiscal quarter ended March 31, 2021. The Company reported that consolidated revenue decreased 14.6%, compared to the prior year first quarter, primarily as a result of lower ready-mixed concrete volumes. The Company’s stock price dropped from $66.81 on May 5, 2021 to $54.61 at the close of trading on May 6, 2021.

On May 13, 2021, following the annual meeting of the Company’s stockholders, the Company Board met with members of senior management and representatives of BNP Paribas to discuss, among other things, a presentation from BNP Paribas regarding exploring a potential strategic combination with an industry participant and potentially contacting such party to discuss a business combination transaction, including an all-stock combination or an all-cash acquisition of the Company by such party. Such party had not approached the Company to discuss a potential transaction and the Company decided not to approach such party at this time.

On May 20, 2021, Mr. Hill called Mr. Pruitt to verbally communicate a proposal to acquire the Company for a per share price of $70.50. Mr. Hill noted that Vulcan would be pursuing the acquisition on its own, without Party A. Mr. Hill also noted that Vulcan was prepared to move quickly and would require only a brief period for due diligence that could be completed alongside the negotiation of definitive agreements.

On May 24, 2021, Vulcan submitted a non-binding written proposal confirming the verbal proposal delivered on May 20 to Mr. Hill. The written proposal also requested a two-week period of exclusivity, which would automatically extend by a week at a time for so long as Vulcan and the Company were negotiating in good faith towards a potential transaction.

Later on May 24, 2021, the Company Board met with representatives of senior management to discuss the proposal from Vulcan. Following discussion, the Company Board instructed Mr. Pruitt to communicate to Mr. Hill that the offer price was not sufficient to engage in further discussions.

On May 25, 2021, Mr. Pruitt communicated the Company Board’s message to Mr. Hill. Following discussion Mr. Hill indicated that Vulcan could offer $74.00 per share and would send a new proposal letter.

 

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On May 27, 2021, Vulcan submitted a non-binding written proposal confirming the verbal proposal delivered on May 25 by Mr. Hill. The written proposal again requested a two-week period of exclusivity, which would automatically extend by a week at a time for so long as Vulcan and the Company were negotiating in good faith towards a potential transaction.

On May 28, 2021, the Company Board held a telephonic conference, with representatives of senior management, Gibson Dunn, Evercore and BNP Paribas to discuss the proposal received from Vulcan and its request for exclusivity. Representatives from Gibson Dunn again reviewed with the Company Board its fiduciary duties in considering the proposed transaction with Vulcan. After discussion, the Company Board instructed Mr. Pruitt to revert to Vulcan and seek additional per share merger consideration as well as clarity regarding the contemplated terms of a potential transaction. The Company Board did not agree to grant exclusivity to Vulcan.

Following the meeting of the Company Board, Mr. Pruitt communicated to Mr. Hill the Company Board’s desire to obtain a higher per share merger consideration. Mr. Hill communicated that $74.00 per share was Vulcan’s best and final price.

On May 29, 2021, Paul Jolas, general counsel of the Company, together with representatives of Gibson Dunn, had a call with Denson N. Franklin III, general counsel of Vulcan, and representatives of Wachtell Lipton to obtain additional clarity regarding the proposed terms of a potential transaction.

On May 31, 2021, representatives of Gibson Dunn received a draft merger agreement from representatives of Wachtell Lipton. Among other things, the draft merger agreement proposed (i) a termination fee of $80,000,000 that would be payable by the Company to Vulcan under certain circumstances, including if the Company terminated the merger agreement with Vulcan to accept a superior proposal, if Vulcan terminated the merger agreement due to the Company’s willful and material breach of the no-shop covenant or the covenant regarding the Company’s proxy statement, or, in some cases, if the Company entered into an alternative proposal within a “tail” period of 18 months; (ii) that Vulcan would use reasonable best efforts to obtain relevant antitrust approvals, but was not explicitly required to divest any assets or agree to any conduct remedies if required and (iii) various procedural restrictions on the Company’s ability to entertain competing offers or for the Company Board to change its recommendation in favor of the transaction after the execution of the merger agreement.

On June 2, 2021, the Company Board held a telephonic conference with representatives of senior management, Gibson Dunn, Evercore and BNP Paribas to discuss the draft merger agreement and the status of negotiations with Vulcan. Representatives of Evercore and BNP Paribas reviewed with the Company Board an update to their respective preliminary financial analyses of the Company. Representatives of Gibson Dunn summarized the merger agreement and discussed responses to be incorporated into a revised draft agreement, including lowering the $80,000,000 termination fee and increasing the obligation on Vulcan to obtain antitrust approvals. The Company Board also discussed the benefits and risks associated with holding discussions regarding a potential sale transaction with additional strategic buyers and the determination regarding the potential grant of exclusivity to Vulcan. Following discussion, with input from the Company’s senior management and legal and financial advisors, the Company Board decided that given the attractive price, Vulcan’s credibility as a buyer and ability to move quickly, the fact that one potential buyer indicated that they would not pay more than $67.00 per share and based on Evercore’s experience with another potential strategic counterparty where it was clear that party was not interested in acquiring the Company, concern regarding the increased risk of leaks, breach of confidentiality and competitors poaching business and employees if the Company conducted a competitive bid process and the opportunity for any overbidders to emerge after signing, the Company Board decided not to contact additional potential acquirers, assuming Vulcan would agree to a market termination fee; the Company Board did not agree to grant exclusivity to Vulcan.

Later on June 2, 2021, representatives of Gibson Dunn delivered to representatives of Wachtell Lipton a revised draft of the merger agreement, which revised draft proposed, among other things, (i) a termination fee of $33,000,000 and limited the circumstances under which a fee would be payable; (ii) provided that Vulcan would

 

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agree to defend through litigation any claim seeking to prohibit consummation of the transaction and agree to divest assets of Vulcan or the Company if required in order to obtain antitrust approval and (iii) removed or limited certain of the procedural restrictions on the Company’s ability to entertain competing offers or for the Company Board to change its recommendation in favor of the transaction after the execution of the merger agreement.

On June 3, 2021, representatives of the Company and Vulcan met at the offices of Vulcan’s financial advisor, the Greystone Group, to discuss due diligence matters.

On June 4, 2021, Mr. Hill and Mr. Pruitt discussed outstanding points in the draft merger agreement, including the amount of the termination fee. Mr. Hill communicated that Vulcan would not accept a termination fee less than $50,000,000 and reiterated that $74.00 per share was Vulcan’s best and final price.

On June 4, 2021, representatives of Wachtell Lipton delivered a revised draft merger agreement which included a $50,000,000 termination fee and committed Vulcan to defend through litigation any claim seeking to prohibit consummation of the transaction and to divest assets of Vulcan or the Company if required in order to obtain antitrust approval, unless the remedial action related to the assets or businesses of the Company’s Polaris subsidiaries.

Also on June 4, 2021, the Company Board held a telephonic conference with representatives of senior management, Gibson Dunn, Evercore and BNP Paribas to discuss the draft merger agreement and the status of negotiations with Vulcan. Representatives of Gibson Dunn highlighted the changes from Vulcan’s revised draft merger agreement including Vulcan’s position that it would divest assets, but would not complete the transaction if required to divest Polaris, and the $50,000,000 termination fee that would be payable by the Company to Vulcan under certain circumstances, including if the Company terminated the merger agreement with Vulcan to accept a superior proposal. Mr. Pruitt also provided an update to the Company Board regarding his discussion with Mr. Hill during which Mr. Hill reiterated that $74.00 per share was Vulcan’s best and final price and Vulcan would not accept a termination fee of less than $50,000,000. The Company Board discussed accepting the $50,000,000 termination fee assuming agreement on all other materials terms and instructed management and Gibson Dunn to achieve the best result possible regarding antitrust obligations, in recognition that Vulcan would not close a transaction without acquiring Polaris.

Later on June 4, 2021, representatives of Gibson Dunn delivered to representatives of Wachtell Lipton a revised draft of the merger agreement, which revised draft proposed, among other things, a reverse termination fee of $75,000,000 payable if the merger agreement is terminated due to a failure to obtain antitrust clearance.

On June 5, 2021, representatives of Gibson Dunn and Wachtell Lipton continued to negotiate the merger agreement, including the amount of the reverse termination fee and the circumstances under which it would be payable and the scope of the antitrust remedial actions required to be taken by Vulcan.

On June 6, 2021, the Company Board held a telephonic meeting, with representatives of Company senior management, Gibson Dunn, Evercore and BNP Paribas in attendance. Representatives of Evercore reviewed with the Company Board its financial analysis of the merger consideration and delivered to the Company Board its opinion to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $74.00 per share in cash to be received by the holders of the Company’s common stock in the merger was fair, from a financial point of view, to such holders, other than Vulcan and its affiliates. Representatives of BNP Paribas then rendered BNP Paribas’s oral opinion, subsequently confirmed by the delivery by BNP Paribas of a written opinion, dated June 6, 2021, that, as of such date, and based on and subject to the assumptions, limitations, qualifications, and other conditions set forth in its written opinion, the merger consideration was fair, from a financial point of view, to the holders of shares of Company common stock entitled to receive such merger consideration. Please see the section of this proxy statement entitled “—Opinions of the Financial Advisors to the Company” beginning on

 

26

page 31 for further description of the respective opinions and analyses of the Company’s financial advisors. Thereafter, representatives of Gibson Dunn summarized the directors’ fiduciary duties and reviewed the proposed merger agreement, and discussed the negotiation regarding the $50,000,000 reverse termination fee. Following discussion, the Company Board unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, were advisable and fair to, and in the best interests of, the Company and its stockholders, and approved and declared advisable the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby, including the merger, and recommended the adoption of the merger agreement by the Company’s stockholders. For a description of the various factors considered by the Company Board, see the section entitled “The Merger—Recommendation of the Company Board.”

After the Company Board meeting, the Company and Vulcan signed the merger agreement. The Company and Vulcan issued a joint press release regarding the transaction before the market open on June  7, 2021.

Recommendation of the Company Board and Reasons for the Merger

The Company Board, at a meeting held on June 6, 2021, unanimously (i) determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders, (ii) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into the merger agreement, (iii) approved the execution and delivery by the Company of the merger agreement, the performance by the Company of its covenants and agreements contained therein and the consummation of the merger and the other transactions upon the terms and subject to the conditions contained therein and (iv) recommended that the Company’s stockholders vote to adopt the merger agreement. Later that day, the Company executed the merger agreement, and the Company and Parent issued a press release announcing the execution of the merger agreement.

In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Company Board consulted with the Company’s senior management team, as well as the Company’s outside legal and financial advisors, and considered a number of factors, including the following material factors (not necessarily listed in order of relative importance):

 

•

that the all-cash per share merger consideration will provide our stockholders with immediate fair value, in cash, for their shares of Company common stock, while avoiding the long-term business risk of retaining their shares of Company common stock, and while also providing such stockholders with certainty of value for their shares of Company common stock;

 

•

that the per share merger consideration represents a premium of approximately 30% to the closing share price of Company common stock on June 4, 2021, the last trading day prior to the Company’s press release announcing a potential transaction between the parties, and a premium of approximately 28% to the volume weighted average share price of Company common stock for the 30 days ended June 4, 2021;

 

•

the Company Board’s understanding of the business, operations, financial condition, earnings and prospects of the Company, including the prospects of the Company as an independent publicly traded entity and its standalone operating plan;

 

•

the analysis and opinion of Evercore, dated June 6, 2021, to the Company Board to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $74.00 per share in cash to be received by the holders of Company common stock in the merger was fair, from a financial point of view, to such holders, other than Vulcan and its affiliates as more fully described below in the section titled “Opinions of the Financial Advisors to the Company” beginning on page 31 of this proxy statement and the full text of the written opinion of Evercore, which is attached as Annex B to this proxy statement;

 

27

•

the analysis of BNP Paribas and its oral opinion, subsequently confirmed in writing, to the Company Board that, as of June 6, 2021 and based upon and subject to the assumptions, limitations, qualifications and conditions described therein, the merger consideration of $74.00 per share to be received by the holders of Company common stock was fair, from a financial point of view, to such holders of Company common stock, as more fully described in the section entitled “ –Opinions of the Financial Advisors to the Company” beginning on page 31 of this proxy statement and the full text of the written opinion of BNP Paribas, which is attached as Annex C to this proxy statement;

 

•

the Company Board’s view that the merger consideration to be paid by Parent was the result of an arm’s-length negotiation and belief that the merger consideration of $74.00 per share represented Parent’s best and final offer;

 

•

The benefits that the Company was able to obtain during its negotiations with Vulcan, including an increase in Vulcan’s offer price per share from the beginning of the process to the end of the negotiations. The Company Board believed that the consideration reflected in the merger agreement was the best transaction that could be obtained by Company stockholders from Vulcan at the time, and that there was no assurance that a more favorable opportunity to sell the Company would arise later or through any alternative transaction;

 

•

the timing of the merger and the risk that if the Company does not accept Vulcan’s offer now, it may not have another opportunity to do so or to pursue an opportunity offering at least as much value to the Company’s stockholders;

 

•

that other potential strategic acquirers may not have the ability or capacity at this time to acquire the Company as a result of recently announced transactions and strategic initiatives;

 

•

Vulcan’s willingness to agree to an antitrust standard that provided an obligation on Vulcan to defend through litigation any claim asserted in any court, agency or other proceeding by any person (including any governmental entity) seeking to delay, restrain, prevent, enjoin or otherwise prohibit consummation of the merger and an obligation to agree to sell, divest, or otherwise convey any particular asset, category, portion or part of an asset or business of Vulcan, the Company and their respective subsidiaries subsequent to the effective time, except that Vulcan is not required to agree or commit to any antitrust remedial action with respect to the assets or businesses of Polaris Materials Corporation and its subsidiaries or Polaris Aggregates Inc. and its subsidiaries;

 

•

the likelihood that the merger would be completed based on, among other things (not necessarily listed in order of relative importance):

 

•

the reputation of Parent;

 

•

Parent’s ability to complete large acquisition transactions and its familiarity with the Company;

 

•

that there is no financing or due diligence condition to the completion of the merger in the merger agreement;

 

•

that the conditions to the closing of the merger are specific and limited in scope and which, in the case of the condition related to the accuracy of the Company’s representations and warranties, are generally subject to a “material adverse effect” qualification;

 

•

that the merger agreement provides that, in the event of a failure of the merger to be consummated under certain circumstances, Parent will pay the Company a $50 million termination fee, without the Company having to establish any damages; and

 

•

the Company’s ability, under certain circumstances pursuant to the merger agreement, to seek specific performance to prevent breaches of the merger agreement by Parent and merger sub and to enforce specifically the terms of the merger agreement;

 

•

the Company’s ability, prior to the time our stockholders adopt the merger agreement, to consider and respond to a written unsolicited bona fide acquisition proposal and provide information to and engage

 

28

in discussions or negotiations with, the person making such a proposal if the Company Board, prior to taking any such actions, determines in good faith, after consultation with its outside legal counsel, that failure to take such actions would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law, and, after consultation with its outside legal counsel and financial advisors, that such acquisition proposal either constitutes a superior proposal or is reasonably expected to lead to a superior proposal (subject to the Company’s obligation to give Parent notice of such discussions);

 

•

the Company’s ability, under certain circumstances, to terminate the merger agreement in order to enter into a definitive agreement with respect to a superior proposal that did not result from a material breach of the non-solicitation restrictions, and that the Company Board determines in good faith after consultation with the Company’s outside legal counsel and financial advisors is a superior proposal, so long as the Company Board has determined in good faith after consultation with the Company’s outside legal counsel, that the failure to take such action would be reasonably likely to constitute a breach of the directors’ fiduciary duties under applicable law and (i) the Company has complied with its obligations to provide timely written notice to Parent of our intention to terminate the merger agreement, (ii) prior to terminating the merger agreement, the Company negotiates with Parent in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of the merger agreement such that the acquisition proposal would no longer constitute a superior proposal, (iii) the Company Board considers in good faith any changes to the merger agreement proposed by Parent and determines that the superior proposal would still constitute a superior proposal and (iv) immediately prior to or substantially concurrently with the termination of the merger agreement, the Company pays Parent a termination fee of $50 million, each of which the Company Board concluded was reasonable in the context of termination fees in comparable transactions and in light of the overall terms of the merger agreement, including the per share merger consideration;

 

•

the Company’s ability, under the merger agreement, to withdraw, change, amend, modify or qualify the Company Board’s recommendation in certain circumstances, subject to Parent’s subsequent right to terminate the merger agreement and receive the $50 million termination fee from the Company;

 

•

the requirement that the merger will only be effective if approved by the holders of at least a majority of all outstanding shares of Company common stock and the absence of any voting commitments by management or other stockholders, providing our stockholders with the right to approve or disapprove of the merger;

 

•

the fact that the merger does not require the approval of Vulcan’s stockholders, with the attendant risks associated with such a vote;

 

•

the Company Board’s view that the terms of the merger agreement would be unlikely to deter third parties from making an unsolicited superior proposal; and

 

•

the availability of appraisal rights under the DGCL to a holder of Company common stock that complies with all of the required procedures under the DGCL, which allows such holder to seek appraisal of the fair value of its shares of Company common stock as determined by the Delaware Court of Chancery.

The Company Board also considered a variety of potentially negative factors in its deliberations concerning the merger agreement and the merger, including the following (not necessarily listed in any relative order of importance):

 

•

the merger would preclude our stockholders from having the opportunity to participate in the future performance of our assets, earnings growth and appreciation of the value of Company common stock;

 

29

•

the significant costs involved in connection with entering into and completing the merger and the substantial time and effort of management required to complete the merger and related disruptions to the operation of our business;

 

•

that neither the Company nor its financial advisors publicly solicited proposals from potential acquirers or conducted a full market check immediately prior to signing the merger agreement as a means of determining whether there were other parties interested in acquiring, or entering into another strategic transaction with, the Company;

 

•

the restrictions on the conduct of our business prior to the completion of the merger, which, subject to specific exceptions, could delay or prevent us from undertaking business opportunities that may arise or any other action the Company would otherwise take with respect to our operations absent the pending completion of the merger;

 

•

that the announcement and pendency of the merger, or failure to complete the merger, may cause substantial harm to relationships with our employees, vendors and customers and may divert management and employee attention away from the day-to-day operation of our business and may result in stockholder litigation;

 

•

the possibility that the $50 million termination fee payable by the Company upon the termination of the merger agreement under certain circumstances could discourage other potential acquirers from making a competing acquisition proposal to acquire the Company;

 

•

the risk that Parent’s matching rights might discourage third parties from submitting a competing acquisition proposal;

 

•

that, while we expect that the merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to complete the merger will be satisfied, including the receipt of necessary regulatory approvals, and, as a result, the merger may not be consummated;

 

•

that an all-cash transaction would be a taxable transaction for U.S. federal income tax purposes; and

 

•

that our directors and executive officers have interests in the merger that may be different from, or in addition to, those of our stockholders. See “—Interests of the Company’s Directors and Executive Officers in the Merger.”

The foregoing discussion of the information and factors considered by the Company Board is not intended to be exhaustive, but includes the material factors considered. In view of the variety of factors considered in connection with its evaluation of the merger, the Company Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Company Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Company Board based its recommendation on the totality of the information presented.

The Company Board unanimously recommends that you vote “FOR” the approval of the merger agreement proposal, “FOR” the approval of the non-binding named executive officer merger-related compensation proposal and “FOR” the approval of the adjournment proposal.

In considering the recommendation of the Company Board with respect to the merger agreement proposal, you should be aware that our directors and executive officers have interests in the merger that may be different from, or in addition to, yours. The Company Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement proposal be approved by the stockholders of the Company. See the section entitled “ —Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 51.

 

30

Opinions of the Financial Advisors to the Company

Opinion of Evercore Group L.L.C.

The Company retained Evercore to act as its lead financial advisor in connection with the merger. As part of this engagement, the Company requested that Evercore evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of Company common stock in the merger, other than Vulcan and its affiliates. At a meeting of the Company Board held on June 6, 2021, Evercore rendered to the Company Board its opinion to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $74.00 per share in cash to be received by the holders of Company common stock in the merger was fair, from a financial point of view, to such holders, other than Vulcan and its affiliates.

The full text of the written opinion of Evercore, dated June 6, 2021, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. The Company encourages you to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Company Board (in its capacity as such) in connection with its evaluation of the proposed merger. The opinion does not constitute a recommendation to the Company Board or to any other persons in respect of the merger, including as to how any holder of shares of Company common stock should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to the Company, nor does it address the underlying business decision of the Company to engage in the merger.

In connection with rendering its opinion Evercore, among other things:

 

•

reviewed certain publicly available business and financial information relating to the Company that Evercore deemed to be relevant, including publicly available research analysts’ estimates;

 

•

reviewed certain internal projected financial data relating to the Company prepared and furnished to Evercore by management of the Company, as approved for Evercore’s use by the Company (the “Forecasts”);

 

•

discussed with management of the Company its assessment of the past and current operations of the Company, the current financial condition and prospects of the Company, and the Forecasts;

 

•

reviewed the reported prices and the historical trading activity of Company common stock;

 

•

compared the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies that Evercore deemed relevant;

 

•

compared the financial performance of the Company and the valuation multiples relating to the merger with the financial terms, to the extent publicly available, of certain other transactions that Evercore deemed relevant;

 

•

reviewed the financial terms and conditions of the merger agreement; and

 

•

performed such other analyses and examinations and considered such other factors that Evercore deemed appropriate.

For purposes of Evercore’s analysis and opinion, Evercore assumed and relied upon the accuracy and completeness of the financial and other information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, without any independent verification of such information (and did not assume responsibility or liability for any independent verification of such information), and further relied upon the assurances of the management of the Company that it was not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the

 

31

Forecasts, Evercore assumed with the Company’s consent that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of the Company as to the future financial performance of the Company and the other matters covered thereby. Evercore expressed no view as to the Forecasts or the assumptions on which they were based.

For purposes of Evercore’s analysis and opinion, Evercore assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement were true and correct, that each party would perform all of the covenants and agreements required to be performed by it under the merger agreement and that all conditions to the consummation of the merger would be satisfied without waiver or modification thereof. Evercore further assumed, in all respects material to its analysis, that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the merger would be obtained without any delay, limitation, restriction or condition that would have an adverse effect on the Company or the consummation of the merger or reduce the contemplated benefits to the holders of Company common stock of the merger.

Evercore did not conduct a physical inspection of the properties or facilities of the Company and did not make or assume any responsibility for making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance sheet assets and liabilities) of the Company, nor was Evercore furnished with any such valuations or appraisals, nor did Evercore evaluate the solvency or fair value of the Company under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion was necessarily based upon information made available to Evercore as of the date thereof and financial, economic, market and other conditions as they existed and as could be evaluated on the date thereof. It was understood that subsequent developments may affect Evercore’s opinion and that Evercore did not have any obligation to update, revise or reaffirm its opinion.

Evercore was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to the holders of Company common stock (other than Vulcan and its affiliates), from a financial point of view, of the merger consideration. Evercore did not express any view on, and Evercore’s opinion did not address, the fairness of the proposed merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of the Company, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or any class of such persons, whether relative to the merger consideration or otherwise. Evercore was not asked to, nor did Evercore express any view on, and Evercore’s opinion did not address, any other term or aspect of the merger agreement or the merger, including, without limitation, the structure or form of the merger, or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the merger agreement. Evercore’s opinion did not address the relative merits of the merger as compared to other business or financial strategies that might be available to the Company, nor did it address the underlying business decision of the Company to engage in the merger. In arriving at its opinion, Evercore was not authorized to solicit, and did not solicit, interest from any third party with respect to the acquisition of any or all of the Company common stock or any business combination or other extraordinary transaction involving the Company. Evercore’s opinion did not constitute a recommendation to the Company Board or to any other persons in respect of the merger, including as to how any holder of shares of Company common stock should vote or act in respect of the merger. Evercore did not express any opinion as to the prices at which shares of Company common stock would trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on the Company or the merger or as to the impact of the merger on the solvency or viability of the Company or the ability of the Company to pay its obligations when they come due. Evercore is not a legal, regulatory, accounting or tax expert and has assumed the accuracy and completeness of assessments by the Company and its advisors with respect to legal, regulatory, accounting and tax matters.

Set forth below is a summary of the material financial analyses reviewed by Evercore with the Company Board on June 6, 2021 in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the

 

32

results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data that existed on or before June 4, 2021 (the last full trading date prior to the rendering of Evercore’s opinion), and is not necessarily indicative of current market conditions.

For purposes of its analyses and reviews, Evercore considered general business, economic, market and financial conditions, industry sector performance, and other matters, as they existed and could be evaluated as of the date of its opinion, many of which are beyond the control of the Company. The estimates contained in Evercore’s analyses and reviews, and the ranges of valuations resulting from any particular analysis or review, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by Evercore’s analyses and reviews. In addition, analyses and reviews relating to the value of companies, businesses or securities do not purport to be appraisals or to reflect the prices at which companies, businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Evercore’s analyses and reviews are inherently subject to substantial uncertainty.

The following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand the analyses, the tables should be read together with the full text of each summary. The tables are not intended to stand alone and alone do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of such analyses.

Summary of Evercore’s Financial Analyses

Selected Public Company Trading Analysis

Evercore reviewed and compared certain financial information of the Company to corresponding financial multiples and ratios for the following selected publicly traded companies in the heavyside construction materials industry (the “selected companies”):

 

•

Cemex, S.A.B. de C.V.

 

•

CRH plc

 

•

Eagle Materials Inc.

 

•

HeidelbergCement AG

 

•

LafargeHolcim Ltd.

 

•

Martin Marietta Materials, Inc.

 

•

Summit Materials, Inc.

 

•

Vulcan Materials Company

For each of the selected companies, Evercore calculated enterprise value (defined as equity market capitalization plus total debt (including, as applicable, pension and other post-employment benefits liabilities), plus preferred equity and minority interest, less cash and cash equivalents) as a multiple of estimated calendar year 2021 and 2022 earnings before interest, taxes, depreciation and amortization (including, as applicable, adjustments for certain non-recurring items) (for purposes of this section, “Adjusted EBITDA”), which we refer to as “2021E Adjusted EBITDA” and “2022E Adjusted EBITDA”, respectively, in each case based on closing share prices as of June 4, 2021. Estimated financial data of the selected companies were based on publicly available research analysts’ estimates.

 

33

This analysis indicated the following:

Selected Public Companies

 

Financial Metric

Low

High

Median

Enterprise Value / 2021E Adjusted EBITDA

6.0x

18.2x

10.5x

Enterprise Value / 2022E Adjusted EBITDA

5.9x

16.7x

9.9x

Based on the multiples it derived for the selected companies and based on its professional judgment and experience, Evercore applied enterprise value to Adjusted EBITDA multiple reference ranges of 8.0x to 10.5x and 7.5x to 10.0x to the Company’s calendar year 2021E Adjusted EBITDA and 2022E Adjusted EBITDA, respectively, in each case based on the Forecasts, to derive an implied enterprise value reference range for the Company. Evercore then subtracted the Company’s estimated net debt (pro forma for the Company’s purchase of the Stockton Cement Terminal, which closed on April 21, 2021, and giving effect to certain expenses associated with the Company’s May 2021 refinancing) and non-controlling interest as of March 31, 2021, and divided by the number of fully diluted shares of Company common stock outstanding, in each case as provided by the Company’s management, to calculate a reference range of implied equity values per share for the Company. This analysis indicated a range of implied equity values per share of Company common stock of $47.25 to $75.50 and $53.50 to $85.75, respectively (in each case rounded to the nearest $0.25), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Although none of the selected companies is directly comparable to the Company, Evercore selected these companies because they are publicly traded companies in the heavyside construction materials industry that Evercore, in its professional judgment and experience, considered generally relevant to the Company for purposes of its financial analyses. In evaluating the selected companies, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting the selected companies and other matters, as well as differences in the selected companies’ financial, business and operating characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the selected companies and the multiples derived from the selected companies. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected companies.

Selected Transactions Analysis

Evercore reviewed, to the extent publicly available, financial information related to the following selected transactions involving publicly-traded target companies in the heavyside construction materials industry announced since 2012 (the “selected transactions”). The selected transactions reviewed by Evercore, and the month and year each was announced, were as follows:

Selected Transactions

 

Date Announced		Target		Acquiror
Aggregates
May 2021		Lehigh Hanson, Inc. (U.S. West Region)		Martin Marietta Materials, Inc.
May 2021		Tiller Corporation		Martin Marietta Materials, Inc.
March 2021		StonePoint Ultimate Holding LLC		Arcosa, Inc.
February 2020		Coram Materials Corp.		U.S. Concrete, Inc.
September 2017		Polaris Materials Corporation		U.S. Concrete, Inc.

 

34

Date Announced		Target		Acquiror
June 2017		Bluegrass Materials Company		Martin Marietta Materials, Inc.
May 2017		Aggregates USA LLC		Vulcan Materials Company
April 2017		Cemex S.A.B. de C.V. (Pacific Northwest U.S. Materials)		HeidelbergCement AG (Cadman Materials, Inc.)
February 2016		Boxley Materials Company		Summit Materials, Inc.
January 2014		Texas Industries, Inc.		Martin Marietta Materials, Inc.
January 2014		Lafarge S.A. (North American Quarries)		Bluegrass Materials Company
Downstream and Other
May 2021		Cementos Argos S.A. (Ready Mix Concrete Plants in Dallas, Texas)		Smyrna Ready Mix Concrete
November 2015		Hope Construction Materials		Breedon Group
February 2015		Lafarge S.A. & Holcim Ltd (Assets)		CRH plc
August 2015		Cemex S.A. (Austria & Hungary Operations)		Rohrdorfer Group
March 2014		AMCOL International Corporation		Minerals Technologies, Inc.
April 2014		Lafarge S.A.		Holcim Ltd.
October 2012		Bode Concrete LLC & Bode Gravel Co.		U.S. Concrete, Inc.
March 2012		Norris Asphalt Paving Company		Summit Materials, Inc.

For each selected transaction, Evercore utilized the publicly available information on transaction value or otherwise calculated the implied enterprise value (defined as the target company’s implied equity value based on the consideration paid in the applicable transaction plus total debt, plus preferred equity and minority interest, less cash and cash equivalents) as a multiple of last twelve-month Adjusted EBITDA for the target company at the time of the announcement of the applicable transaction (or in some cases where last twelve-month financial information was not publicly available, as a multiple of other publicly available Adjusted EBITDA). Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction.

This analysis indicated the following:

Selected Transaction Analysis

 

Financial Metric

Low

High

Median

Mean

Aggregates

EV / Adjusted EBITDA

8.5x

18.6x

12.9x

12.4x

Downstream and Other

EV / Adjusted EBITDA

8.6x

11.7x

9.5x

9.8x

Overall

EV / Adjusted EBITDA

8.5x

18.6x

10.7x

11.1x

Note: The multiple from the Polaris Materials / U.S. Concrete transaction was excluded from the calculation of the mean and high statistics because the figure was greater than 25.0x and considered not meaningful. Low, high, median and mean statistics excluded multiples from the following transactions because such figures were not

 

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available: Aggregates USA LLC / Vulcan Materials Company, Cemex S.A.B. de C.V. (Pacific Northwest U.S. Materials) / HeidelbergCement AG, Boxley Materials Company / Summit Materials, Inc., Lafarge S.A. (North American Quarries) / Bluegrass Materials Company, Cemex S.A. (Austria & Hungary Operations) / Rohrdorfer Group and Norris Asphalt Paving Company / Summit Materials, Inc.

Based on the multiples it derived from the selected transactions and based on its professional judgment and experience, Evercore selected a reference range of enterprise value to last twelve months, or “LTM”, Adjusted EBITDA multiples of 9.5x to 11.0x and applied this range of multiples to the Company’s LTM Adjusted EBITDA as of March 31, 2021 (pro forma for the full-year impact of the Company’s purchase of the Stockton Cement Terminal and the Company’s purchase of the Orca Quarry land and royalty agreement, which closed on March 17, 2021), based on the financial results for the Company provided by the Company’s management, to derive an implied enterprise value reference range for the Company. Evercore then subtracted the Company’s estimated net debt (pro forma for the Company’s purchase of the Stockton Cement Terminal and giving effect to certain expenses associated with the Company’s May 2021 refinancing) and non-controlling interest as of March 31, 2021, and divided by the number of fully diluted shares of Company common stock outstanding, in each case as provided by the Company’s management, to calculate a reference range of implied equity values per share for the Company. This analysis indicated a range of implied equity values per share of Company common stock of $60.25 to $76.75 (rounded to the nearest $0.25), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Although none of the target companies or businesses reviewed in the selected transactions analysis is directly comparable to the Company and none of the selected transactions is directly comparable to the merger, Evercore selected these transactions because they involve companies or businesses that Evercore, in its professional judgment and experience, considered generally relevant to the Company for purposes of its financial analyses. In evaluating the selected transactions, Evercore made judgments and assumptions with regard to general business, economic and market conditions and other factors existing at the time of the selected transactions, and other matters, as well as differences in financial, business and operating characteristics and other factors relevant to the target companies or businesses in the selected transactions. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the target companies or businesses in the selected transactions and the multiples derived from the selected transactions. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected transactions.

Discounted Cash Flow Analysis

Evercore performed a discounted cash flow analysis of the Company to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate during the second quarter through fourth quarter of calendar year 2021 and the calendar years 2022 through 2025 based on the Forecasts. Evercore calculated terminal values for the Company by applying a range of perpetuity growth rates of 2.25% to 3.25%, which range was selected based on Evercore’s professional judgment and experience, to a terminal year estimate of the unlevered, after-tax free cash flows that the Company was forecasted to generate based on the Forecasts. The cash flows and terminal values in each case were then discounted to present value as of March 31, 2021 using discount rates ranging from 9.0% to 10.0%, which were based on an estimate of the Company’s weighted average cost of capital, and using the mid-year cash flow discounting convention, to derive an implied enterprise value reference range for the Company. Evercore then subtracted the Company’s estimated net debt (pro forma for the Company’s purchase of the Stockton Cement Terminal and giving effect to certain expenses associated with the Company’s May 2021 refinancing) and non-controlling interest as of March 31, 2021, and divided by the number of fully diluted shares of Company common stock outstanding, in each case as provided by the Company’s management, to calculate a reference range of implied equity values per share for the Company. This analysis indicated a range of implied equity values per share of Company common stock of $47.00 to $75.75 (rounded to the nearest $0.25), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

 

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Other Factors

Evercore also noted certain other factors, which were not considered material to its financial analyses with respect to its opinion, but were referenced for informational purposes only, including, among other things, the following:

Illustrative Present Value of Future Share Price Analysis

Evercore performed an illustrative analysis of the implied present value of the future price per share of Company common stock, which is designed to provide an indication of the present value of a theoretical future value of the Company’s equity as a function of the Company’s estimated next twelve months Adjusted EBITDA, which we refer to as “NTM Adjusted EBITDA,” and an assumed enterprise value to NTM Adjusted EBITDA multiple.

In calculating the implied present value of the future price per share of Company common stock, Evercore first calculated the implied future enterprise value of the Company by multiplying the Company’s estimated NTM Adjusted EBITDA as of the end of calendar year 2024, based on the Forecasts, by an illustrative enterprise value to NTM Adjusted EBITDA multiple range of 7.0x to 8.5x, which range was selected based on Evercore’s professional judgment and experience, to derive an implied future enterprise value reference range for the Company. Evercore then subtracted the Company’s estimated net debt (pro forma for the Company’s purchase of the Stockton Cement Terminal and giving effect to certain expenses associated with the Company’s May 2021 refinancing) and non-controlling interest as of as of the end of calendar year 2024, and divided by the number of estimated fully diluted shares of Company common stock outstanding, in each case as provided by the Company’s management, to calculate a reference range of implied future equity values per share for the Company. Evercore then discounted the implied future price per share back to March 31, 2021 using an illustrative discount rate of 13.0%, which was based on an estimate of the Company’s cost of equity. This analysis indicated a range of implied equity values per share of Company common stock of $56.25 to $72.25 (rounded to the nearest $0.25), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Illustrative Sponsor Ability to Pay Analysis

Evercore performed an illustrative sponsor ability to pay analysis to determine the range of price per share of Company common stock at which a financial sponsor might effect a leveraged buyout of the Company based on the Forecasts. For purposes of its analysis, Evercore assumed a required internal rate of return in the range of 17.5% to 22.5%, a total leverage ratio of 5.5x to the Company’s estimated LTM Adjusted EBITDA as of March 31, 2021 (pro forma for the full-year impact of the Company’s purchase of the Stockton Cement Terminal and the Company’s purchase of the Orca Quarry land and royalty agreement), and applied exit multiples in the range of 7.5x to 9.0x to the Company’s estimated 2025 LTM Adjusted EBITDA, in each case based on the Forecasts. Evercore selected the internal rates of return, leverage ratios and exit multiples based upon the application of its professional judgment and experience.

This analysis indicated a range of implied equity values per share of Company common stock of $45.50 to $64.50 (rounded to the nearest $0.25), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Illustrative Sum-of-the-Parts Analysis

Evercore performed an illustrative sum-of-the-parts analysis of the Company, to calculate a range of implied equity values per share of Company common stock, based on the financial results for LTM Adjusted EBITDA as of March 31, 2021 for the Company provided by Company management. This analysis was performed by analyzing the implied value of each product segment of the Company and the implied value of each business region of the Company.

 

37

Illustrative Sum-of-the-Parts Analysis by Product

Evercore performed an illustrative sum-of-the-parts analysis of the Company to calculate a range of implied equity values per share of Company common stock, based on the financial results for LTM Adjusted EBITDA as of March 31, 2021 for the Company provided by Company management for the ready mix concrete and other products segment and the aggregates product segment (excluding the tax impact of separating the ready mix and other products and aggregates product segments). Evercore first calculated a range of illustrative enterprise values for the ready mix concrete and other products segment by applying a range of enterprise value to LTM Adjusted EBITDA multiples of 8.0x to 9.5x, which range was selected based on Evercore’s professional judgment and experience, to the LTM Adjusted EBITDA for the ready mix concrete and other products segment as of March 31, 2021. Evercore then calculated a range of illustrative enterprise values for the aggregates product segment by applying a range of enterprise value to LTM Adjusted EBITDA multiples of 11.0x to 13.5x, which range was selected based on Evercore’s professional judgment and experience, to the LTM Adjusted EBITDA for the aggregates product segment as of March 31, 2021. Evercore then calculated an illustrative range of implied equity values per share of Company common stock by adding the enterprise values of the ready mix concrete and other products and the aggregates product segments, subtracting the amount of the Company’s estimated net debt (pro forma for the Company’s purchase of the Stockton Cement Terminal and giving effect to certain expenses associated with the Company’s May 2021 refinancing) and non-controlling interest as of March 31, 2021, and dividing by the number of fully diluted shares of Company common stock outstanding, in each case as provided by the Company’s management. This analysis indicated a range of implied equity values per share of Company common stock of $55.75 to $76.00 (rounded to the nearest $0.25), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Illustrative Sum-of-the-Parts Analysis by Region

Evercore performed an illustrative sum-of-the-parts analysis of the Company to calculate a range of implied equity values per share of Company common stock, based on the financial results for LTM Adjusted EBITDA as of March 31, 2021 for the Company provided by Company management for the West region segment and the East and Central regions segment. Evercore first calculated a range of illustrative enterprise values for the West region segment by applying a range of enterprise value to LTM Adjusted EBITDA multiples of 10.0x to 11.5x, which range was selected based on Evercore’s professional judgment and experience, to the LTM Adjusted EBITDA for the West region segment as of March 31, 2021. Evercore then calculated a range of illustrative enterprise values for the East and Central regions segment by applying a range of enterprise value to LTM Adjusted EBITDA multiples of 9.0x to 10.5x, which range was selected based on Evercore’s professional judgment and experience, to the LTM Adjusted EBITDA for the East and Central regions segment as of March 31, 2021. Evercore then calculated an illustrative range of implied equity values per share of Company common stock by adding the enterprise values of the West region and the East and Central regions segments, subtracting the amount of the Company’s estimated net debt (pro forma for the Company’s purchase of the Stockton Cement Terminal and giving effect to certain expenses associated with the Company’s May 2021 refinancing) and non-controlling interest as of March 31, 2021, and dividing by the number of fully diluted shares of Company common stock outstanding, in each case as provided by the Company’s management. This analysis indicated a range of implied equity values per share of Company common stock (rounded to the nearest $0.25) of $58.50 to $74.75 (assuming no tax impact) and $54.75 to $69.25 (including the implied tax impact of separating the East and Central regions from the West region, based on the information provided by Company management), compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Equity Research Analyst Price Targets

Evercore reviewed selected public market trading price targets for the shares of Company common stock prepared and published by equity research analysts that were publicly available as of June 4, 2021, the last full

 

38

trading day prior to the delivery by Evercore of its opinion to the Company Board. These price targets reflect analysts’ estimates of the undiscounted future public market trading price of the shares of Company common stock at the time the price target was published. As of June 4, 2021, the range of selected equity research analyst price targets per share of Company common stock was $39.00 to $80.00, with a median price target of $65.00 per share. Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the shares of Company common stock and these target prices and the analysts’ earnings estimates on which they were based are subject to risk and uncertainties, including factors affecting the financial performance of the Company and future general industry and market conditions.

52-Week Trading Range

Evercore reviewed historical trading prices of shares of Company common stock during the twelve month period ended June 4, 2021, noting that the intraday low and high prices during such period ranged from $20.77 to $78.99 per share of Company common stock, respectively, compared to the merger consideration of $74.00 per share of Company common stock and the closing price of Company common stock of $57.14 per share on June 4, 2021.

Miscellaneous

The foregoing summary of Evercore’s financial analyses does not purport to be a complete description of the analyses or data presented by Evercore to the Company Board. In connection with the review of the merger by the Company Board, Evercore performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, Evercore made its determination as to fairness on the basis of its professional judgment and experience after considering the results of all the analyses. In addition, Evercore may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of Evercore with respect to the actual value of the shares of Company common stock. Rounding may result in total sums set forth in this section not equaling the total of the figures shown.

Evercore prepared these analyses for the purpose of providing an opinion to the Company Board as to the fairness, from a financial point of view, of the merger consideration to be received by the holders of Company common stock, other than Vulcan and its affiliates. These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by such estimates. Accordingly, estimates used in, and the results derived from, Evercore’s analyses are inherently subject to substantial uncertainty, and Evercore assumes no responsibility if future results are materially different from those forecasted in such estimates.

Evercore’s financial advisory services and its opinion were provided for the information and benefit of the Company Board (in its capacity as such) in connection with its evaluation of the proposed merger. The issuance of Evercore’s opinion was approved by an Opinion Committee of Evercore.

Evercore did not recommend any specific amount of consideration to the Company Board or the Company’s management or that any specific amount of consideration constituted the only appropriate consideration in the merger for the holders of Company common stock.

 

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Pursuant to the terms of Evercore’s engagement letter with the Company, the Company has agreed to pay Evercore a fee for its services in the amount of approximately $22.75 million, of which $3 million was paid upon delivery of Evercore’s opinion, and the balance of which will be payable contingent upon the consummation of the merger. The Company has also agreed to reimburse Evercore for its expenses and to indemnify Evercore against certain liabilities arising out of its engagement.

During the two year period prior to the date of its opinion, Evercore and its affiliates have provided financial advisory services to the Company and received fees for the rendering of these services in the amount of approximately $250,000. In addition, during the two year period prior to the date of its opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to Vulcan and Evercore has not received any compensation from Vulcan during such period. Evercore may provide financial advisory or other services to the Company and Vulcan in the future, and in connection with any such services Evercore may receive compensation.

Evercore and its affiliates engage in a wide range of activities for its and their own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and related activities. In connection with these businesses or otherwise, Evercore and its affiliates and/or its or their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products or other financial instruments of or relating to the Company or its affiliates, Vulcan, potential parties to the merger and their respective affiliates or persons that are competitors, customers or suppliers of the Company.

The Company engaged Evercore to act as a financial advisor based on Evercore’s qualifications, experience and reputation. Evercore is an internationally recognized investment banking firm and regularly provides fairness opinions to its clients in connection with mergers and acquisitions, leveraged buyouts and valuations for corporate and other purposes.

Opinion of BNP Paribas Securities Corp.

At the meeting of the Company Board on June 6, 2021, BNP Paribas rendered to the Company Board its oral opinion, subsequently confirmed by delivery of a written opinion dated June 6, 2021, that, based on and subject to the assumptions, limitations, qualifications, and other conditions set forth in such opinion, as of such date, the merger consideration was fair, from a financial point of view, to the holders of shares of the Company common stock entitled to receive such merger consideration.

The full text of the written opinion of BNP Paribas, dated June 6, 2021, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached as Annex C to this proxy statement with the permission of BNP Paribas and is incorporated by reference into this proxy statement. You are urged to read the opinion carefully. The summary of the opinion of BNP Paribas set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. The opinion of BNP Paribas was provided to the Company Board (in its capacity as such) for its information in connection with its consideration and evaluation of the merger and addressed only the fairness, from a financial point of view, of the merger consideration to the holders of shares of the Company common stock entitled to receive such merger consideration as of the date of such opinion. The opinion of BNP Paribas did not address any other matter, including any other term or aspect of the merger agreement or the merger including, without limitation, the structure or form of the merger, any term or aspect of any other transaction, agreement or instrument contemplated by the merger agreement or to be entered into or amended in connection with the merger or the fairness, financial or otherwise, of the merger to, of any consideration to be paid to or received by or of the impact of the merger on, the holders of cancelled shares, dissenting shares or converted shares or any other class

 

40

of securities, the creditors or the other constituencies of the Company or any other party. The opinion of BNP Paribas does not constitute a recommendation to the Company Board or to any other person in connection with the merger, including as to how any holder of shares of the Company common stock should vote or act in respect of the merger.

In arriving at its opinion, BNP Paribas reviewed a draft of the merger agreement, dated June 6, 2021. Additionally, in the course of performing its review and analysis for rendering its opinion, BNP Paribas, among other things:

 

•

reviewed certain publicly available business and financial information concerning the Company that BNP Paribas deemed relevant;

 

•

reviewed certain non-public financial and operating data concerning the Company and its prospects prepared and provided to BNP Paribas by senior management of the Company, including certain financial forecasts as described in “ — Certain Company Forecasts” beginning on page 48 (the “Company forecasts”);

 

•

met with certain members of senior management of the Company to discuss such management’s strategic and financial rationale for the merger, the past and current operations, the financial projections, the future prospects and operations and the current financial condition of the Company, the effects of the merger on the financial conditions and future prospects of the Company and other matters BNP Paribas deemed necessary and appropriate to its inquiry;

 

•

reviewed the reported prices and historical trading activity of the shares of the Company common stock;

 

•

compared certain financial and stock market information concerning the Company with similar publicly available information concerning other publicly traded companies BNP Paribas deemed relevant;

 

•

compared the financial terms of the merger with the publicly available financial terms of other mergers and acquisitions involving companies which BNP Paribas deemed relevant;

 

•

reviewed the draft merger agreement; and

 

•

conducted such other studies, analyses, inquiries and investigations and considered such other factors that BNP Paribas deemed appropriate for purposes its opinion.

In arriving at its opinion, BNP Paribas relied upon and assumed the accuracy and completeness of all financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by or for BNP Paribas or obtained by BNP Paribas from public sources, including, without limitation, the financial projections referred to above. BNP Paribas did not assume any responsibility or liability for the independent verification of, and did not independently verify, any such information, including, without limitation, the financial projections. In relying on the financial forecasts provided to BNP Paribas, BNP Paribas have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by the Company’s senior management as to the expected future results of operations and financial condition of the Company to which such forecasts relate. BNP Paribas expressed no view or opinion as to forecasts or the assumptions upon which they are based. BNP Paribas further relied upon the assurances of the Company’s senior management that they are unaware of any facts or circumstances that would make the information or financial projections incomplete, inaccurate or misleading in any material respect.

In arriving at its opinion, BNP Paribas did not conduct a physical inspection of the properties and facilities of the Company or any of its subsidiaries and did not performed or obtain, and did not assume any responsibility for performing or obtaining, any independent evaluation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of the Company or any of its subsidiaries, nor was BNP Paribas furnished with any such evaluations or appraisals. Moreover, BNP Paribas did not evaluate the solvency or fair value of the Company under any state, federal or foreign laws relating to bankruptcy, insolvency

 

41

or similar matters. In rendering its opinion, BNP Paribas assumed that, (i) the Company, Parent and merger sub will comply with all material terms of the merger agreement, (ii) the respective representations and warranties of the Company, Parent and merger sub contained in the merger agreement are true and correct and all conditions to the obligations of each party to the merger to consummate the merger will be satisfied without any waiver thereof and (iii) the merger will be consummated in a timely manner and in accordance with the terms of the merger agreement without any limitations, restrictions or conditions, including any divestiture requirements or amendments or modifications (regulatory or otherwise) that would have a material effect on the Company or the contemplated benefit of the merger. BNP Paribas further assumed that all governmental, regulatory and other consents, approvals, releases or waivers necessary for the consummation of the merger will be obtained within the constraints contemplated by the merger agreement in all respects material to BNP Paribas’ analysis and its opinion, without any material delay, limitation, restriction or condition that would have an adverse effect on the Company or the consummation of the merger or materially reduce the benefits to the holders of shares of the Company common stock in connection with the merger. BNP Paribas also assumed that the executed merger agreement would not differ in any material respect from the draft merger agreement reviewed by BNP Paribas.

BNP Paribas are not legal, regulatory, tax, accounting or actuarial experts and relied on the assessments made by the Company and its advisors (other than BNP Paribas) with respect to such issues. BNP Paribas did not express any view or render any opinion regarding the tax consequences or accounting consequences of the merger to the Company or its stockholders. In rendering its opinion, BNP Paribas did not express any view or opinion as to the price or range of prices at which the shares of the Company common stock may trade subsequent to the announcement or consummation of the merger.

The opinion of BNP Paribas expressed no view or opinion as to the fairness, financial or otherwise, of the merger to, or of any consideration to be paid to or received by, holders of shares of the Company common stock as to which dissenters’ rights have been perfected, any shares of the Company common stock owned by Parent, merger sub or any direct or indirect wholly owned subsidiary of Parent or the Company and any shares held in the treasury of the Company or any other class of securities, creditors or other constituencies of the Company or any other party. The opinion of BNP Paribas did not address the Company’s underlying business or financial decision to pursue the merger, the relative merits of the merger as compared to any alternative business or financial strategies that might exist for the Company, the financing of the merger and related transactions or the effects of any other transaction in which the Company might engage. Furthermore, BNP Paribas expressed no view or opinion as to the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation payable to or to be received by any officers, directors or employees of the Company or any other party to the merger, or any class of such persons, relative to the merger consideration to be paid to the holders of shares of the Company common stock entitled to such merger consideration.

The opinion of BNP Paribas has been authorized for issuance by the fairness opinion committee of BNP Paribas and is subject to the assumptions, limitations, qualifications and other conditions set forth in the opinion and is necessarily based on economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BNP Paribas, as of the date of such opinion. It should be understood that subsequent developments may affect the opinion of BNP Paribas and BNP Paribas assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of such opinion.

Set forth below is a summary of the material financial analyses reviewed by BNP Paribas with the Company Board in connection with rendering its opinion. The following summary does not, however, purport to be a complete description of the analyses performed by BNP Paribas. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by BNP Paribas. Certain of the financial analyses summarized below include information presented in tabular format. In order to fully understand BNP Paribas’ financial analyses, the table must be read together with the text of the related summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial

 

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analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses of BNP Paribas. Mathematical analysis, such as determining the arithmetic median, or the high or low, is not in itself a meaningful method of using selected company data.

Discounted Cash Flow Analysis

BNP Paribas performed a discounted cash flow analysis to calculate a range of implied equity values per share for the Company common stock. A discounted cash flow analysis is a method of valuing a company using estimates of the future unlevered free cash flows generated by the company and taking into consideration the time value of money with respect to those future cash flows to derive a “present value” using a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital and other appropriate factors. For purposes of this section, “Terminal value” refers to the capitalized value of all cash flows from a company for periods beyond the forecast period.

BNP Paribas calculated the unlevered free cash flow that the Company is projected to generate from June 30, 2021 through December 31, 2025 based on the Company forecasts, which amounts were approved by Company management for use by BNP Paribas for purposes of its opinion and financial analyses. The Company forecasts are discussed in more detail in “— Certain Company Forecasts” beginning on page 48.

BNP Paribas also calculated a range of terminal values for the Company by applying perpetuity growth rates ranging from 2.5% to 3.0% to the Company’s unlevered free cash flow as estimated for the terminal period. Such growth rates were chosen by BNP Paribas based on its professional judgment and experience. Unlevered free cash flow for the terminal period was derived from the Company’s estimated unlevered free cash flow for the fiscal year ending December 31, 2025 (calculated as after-tax earnings, plus depreciation and amortization, less capital expenditures, less change in net working capital, less after-tax stock-based compensation, less the Company’s investment in the Black Bear expansion, in each case as forecast in Company forecasts) using the perpetuity growth rate as applied based on the range noted above. The unlevered free cash flows and the range of terminal values were then discounted to present value as of June 30, 2021 using discount rates ranging from 8.7% to 9.4%, which were chosen by BNP Paribas based on its professional judgment and experience and taking into account an analysis of the estimated weighted average cost of capital of the Company.

The present value of the unlevered free cash flows and the range of terminal values were then adjusted for the Company’s estimated net debt as of June 1, 2021 and minority interests, in each case as provided by the Company’s management.

This analysis indicated the following range of implied equity values per share for the Company:

Implied Equity Value Per Share

$58.12-$78.78

BNP Paribas compared the results of this analysis to the merger consideration of $74.00 per share, noting that the merger consideration is within the implied valuation range.

Comparable Trading Multiples

BNP Paribas performed a comparable trading multiples analysis of the Company’s common stock by comparing the Company to similar companies that are publicly traded. Using publicly available information, BNP Paribas compared selected financial data of the Company with similar data for selected publicly traded companies

 

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engaged in businesses which BNP Paribas judged to be comparable to the Company’s businesses or aspects thereof. The companies selected by BNP Paribas were:

 

		Vulcan Materials Company
		Martin Marietta Materials
		Summit Materials
		Eagle Materials

The companies were selected because of similarities to the Company in one or more their businesses, financial and/or operational characteristics based on judgments and assumptions made by BNP Paribas. However, none of the selected companies is identical or directly comparable to the Company and certain of the companies may have characteristics that are materially different from the Company. For each selected company, BNP Paribas calculated such company’s expected EBITDA for 2021 (referred to in this section as “2021E”) and for 2022 (referred to in this section as “2022E”). For purposes of this analysis, “EBITDA” means a company’s earnings before interest, taxes, depreciation and amortization, with adjustments to exclude the effects of material one- time or non-recurring items as BNP Paribas deemed appropriate. BNP Paribas then divided each such company’s Enterprise Value (as defined below) by its expected EBITDA for 2021E (referred to in this section as “2021E EV/EBITDA”) and 2022E (referred to in this section as “2022E EV/EBITDA”). For purposes of this analysis, a company’s “Enterprise Value” was calculated as the fully diluted common equity value of such company plus the value of such company’s indebtedness and minority interests and preferred stock, minus such company’s cash, cash equivalents, and short-term and long-term liquid investments.

The following table represents the results of this analysis of the 2021E EV/EBITDA and 2022E EV/EBITDA multiples as of June 4, 2021 of the above-identified comparable publicly traded companies:

 

		2021E EV/EBITDA				2022E EV/EBITDA
High			18.0x				16.3x
Low			11.4x				10.4x

For purposes of its analysis of the selected companies in the table above, BNP Paribas used estimates of EBITDA based on consensus analyst research estimates, and based on publicly available financial data, including from S&P Capital IQ.

BNP Paribas then made qualitative judgments concerning differences between the business, financial and operating characteristics and prospects of the Company and the selected companies that could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative analysis set forth in the above table. Such qualitative judgments included consideration of (among other factors) differing sizes, end market exposures, relative product mixes, growth prospects, profitability levels and degrees of operational and financial risk between the Company and the companies included in the selected company analysis. Historic relative public trading values of the selected companies were also considered.

Based upon these judgments, BNP Paribas selected a reference range of multiples of 8.5x to 10.5x and applied such range to the Company’s 2021E EBITDA based on the Company forecasts and a reference range of multiples of 7.5x to 9.5x and applied such range to the Company’s 2022E EBITDA based on the Company forecasts, to calculate the Company’s equity value per share.

This analysis indicated the following ranges of implied equity values per share for the Company:

 

		Implied Equity Value Per Share
2021E EBITDA		$	51.44-74.22
2022E EBITDA		$	51.34-77.12

 

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BNP Paribas then compared the implied equity values per share to the merger consideration of $74.00 per share and noted that the merger consideration is within both implied valuation ranges.

Precedent Transaction Multiples

BNP Paribas performed a comparable transaction analysis, which attempts to provide a range of implied equity values per share for the Company common stock by comparing the merger to similar precedent transactions. BNP Paribas reviewed publicly available financial terms of selected precedent transactions in the aggregates, ready mix concrete and integrated aggregates and ready mix concrete industries since 2005, which BNP Paribas judged to be generally relevant for comparative purposes as transactions involving companies with businesses comparable to the Company’s businesses or aspects thereof as follows:

 

Integrated
Announcement Date		Acquiror		Target
May 2021		Martin Marietta Materials		Lehigh Hanson (West)
May 2021		Martin Marietta Materials		Tiller Corporation
February 2016		Summit Materials		Boxley Materials
December 2014		Lone Star		Hanson Building Products
January 2014		Martin Marietta Materials		Texas Industries
October 2012		U.S. Concrete		Bode Concrete and Gravel
Aggregates
Announcement Date		Acquiror		Target
March 2021		Arcosa		Stonepoint
February 2020		U.S. Concrete		Coram
September 2017		U.S. Concrete		Polaris
June 2017		Martin Marietta Materials		Bluegrass Materials
July 2010		Bluegrass Materials		CEMEX
February 2010		SPO Partners		Ready Mix USA (Quarries Assets)
Ready Mix Concrete
Announcement Date		Acquiror		Target
May 2021		SRM		Argos Dallas
August 2007		Boral		Schwarz Readymix
March 2007		Titan		S&W Ready Mix
October 2005		Argos		Southern Concrete

BNP Paribas reviewed transaction values for each transaction, calculated as the purchase price paid in the transaction plus debt and minority interests less cash, cash equivalents and equity investments, as a multiple of latest 12 months reported EBITDA, or, where data on latest 12 months was not available, estimate of current year EBITDA based on publicly available information. Financial terms of the selected transactions were based on public filings, press releases, Wall Street research reports and other publicly available information. The following table sets forth the results of this analysis by sector:

 

		Integrated		Aggregates		Ready Mix Concrete
Range		8.5x-18.6x		9.1x-56.1x		4.9x-10.6x
Mean		11.3x		11.6x(1)		7.0x
Median		10.2x		11.4x(1)		6.3x

 

(1)	Excludes outlier multiple from U.S. Concrete’s acquisition of Polaris.

BNP Paribas then made qualitative judgments concerning differences between the business, financial and operating characteristics and prospects of the Company and the companies involved in the selected transactions, as well as other factors, in order to provide a context in which to consider the results of the quantitative analysis

 

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set forth in the above table. Such qualitative judgments included consideration of (among other factors) the differing sizes, end market exposures, relative product mixes, growth prospects, profitability levels and degrees of operational and financial risk between the Company and the companies included in the selected company analysis. Based upon these judgments, BNP Paribas selected a reference range of multiples of 8.5x-10.5x and applied such range to the Company’s LTM EBITDA as of March 30, 2021 to calculate a range of implied equity values per share for the Company.

This analysis indicated the following range of implied equity values per share for the Company:

Implied Equity Value Per Share

$44.55-65.71

BNP Paribas then compared the implied equity values per share to the merger consideration of $74.00 per share and noted that the merger consideration is above the implied valuation range.

Other Information

BNP Paribas also noted certain additional factors that were not part of its valuation process, but were referenced for informational purposes, including the following:

 

•

historical trading performance of the Company common stock during the 52-week period ended on June 4, 2021, which ranged from a low of $20.65 per share to a high of $78.99 per share; and

 

•

publicly available Wall Street research analysts’ reports relating to the Company common stock containing 12-month price targets ranging from $39.00 to $80.00 per share.

In accordance with customary investment banking practice, BNP Paribas employed generally accepted valuation practices and performed a variety of financial and comparative analyses for purposes of rendering its opinion. The foregoing summary of certain material financial analyses does not purport to be a complete description of the financial and comparative analyses or data considered by BNP Paribas in rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. In arriving at its opinion, BNP Paribas did not attribute any particular weight to any analysis or factor considered by it. Rather, BNP Paribas made its determination as to fairness on the basis of its experience and professional judgment after considering the totality of factors and analyses performed and did not draw conclusions as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. In addition, BNP Paribas may have considered various assumptions more or less probable than other assumptions. As a result, the range of valuations resulting from any particular analysis described above should not be taken as BNP Paribas’ view of the value of the Company. BNP Paribas believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the analysis or of the summary of the analysis could result in an incomplete view of the processes and assumptions underlying the analysis and BNP Paribas’ opinion.

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by BNP Paribas are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, BNP Paribas’ analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold. No company used in the analyses summarized above is identical to the Company, and certain of the companies may have characteristics that are materially different from those of the Company. No transaction used in the analyses summarized above is directly comparable to the merger, and certain of the transactions may have characteristics that are materially different from those of the merger. The comparable companies and precedent transactions were selected by BNP Paribas because they have operations and businesses that, for purposes of the analyses performed, may be considered similar to the Company. However, the analyses undertaken by BNP Paribas

 

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necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the acquisition, public trading or other values of the companies or transactions used in the analyses, including judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters.

The Company Board engaged BNP Paribas to act as a financial advisor to the Company based on its qualifications, experience, reputation and familiarity with the Company and its businesses. BNP Paribas is an internationally recognized investment banking firm and is regularly engaged in the valuation of businesses in connection with mergers and acquisitions, leveraged buyouts, private placements and valuations for corporate and other purposes.

The merger consideration was determined through arm’s-length negotiations between the Company Board and Parent, and the Company Board approved and adopted the merger agreement. BNP Paribas provided advice to the Company and the Board during those negotiations but did not recommend any specific merger consideration to the Company or the Company Board or recommend that any specific merger consideration constituted the only appropriate consideration for the merger.

Pursuant to an engagement letter dated June 4, 2021, the Company retained BNP Paribas as its financial advisor in connection with the potential sale of the Company. In connection therewith, BNP Paribas will receive a fee from the Company for its services which is estimated to be approximately $8.4 million as of the date of this proxy statement, approximately $6.4 million of which will become payable only if the merger is consummated and $2 million of which BNP Paribas earned upon delivery of its opinion to the Board, regardless of whether the merger is consummated. In addition, the Company has agreed to reimburse BNP Paribas for certain expenses and to indemnify BNP Paribas against certain liabilities arising out of its engagement by the Company.

During the two years preceding the date of its opinion, BNP Paribas and its affiliates have been engaged by the Company and certain of its affiliates to provide certain investment banking, financial advisory and other banking services on matters unrelated to the merger, for which BNP Paribas and its affiliates have received, or expect to receive, customary fees and compensation equal to approximately $657,500 in the aggregate (of which approximately $407,500 was received after the date of the opinion and prior to the date of this proxy statement). Such services during such period have included having acted as a joint bookrunner on a debt capital markets transaction for the Company, having acted or acting as a joint arranger under the Company’s Term Loan B, and agreeing to act as a lender under the Company’s asset-backed revolving credit facility. During the two years preceding the date of its opinion, BNP Paribas has not been engaged by Parent as a financial advisor. Furthermore, BNP Paribas and its affiliates may seek in the future to provide the Company, the Parent, the Merger Sub and their respective affiliates with investment banking, financial advisory and other banking services unrelated to the merger.

BNP Paribas and its affiliates engage in a wide range of financial services activities for their own accounts and the accounts of their customers, including asset and investment management, investment banking, corporate finance, mergers and acquisitions, restructuring, merchant banking, fixed income and equity sales, trading and research, derivatives, foreign exchange and futures. In the ordinary course of these activities, BNP Paribas and its affiliates do and in the future may (i) provide such financial services to the Company, Parent, merger sub or their respective affiliates or subsidiaries (as the case may be), for which services BNP Paribas and/or certain of its affiliates have received, and may receive, compensation and (ii) directly or indirectly, hold long or short positions, trade or otherwise conduct such activities in or with respect to debt or equity securities, bank debt and/or derivative products relating to the Company, Parent, merger sub or their respective affiliates or subsidiaries (as the case may be).

 

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Certain Company Forecasts

The Company does not, as a matter of course, prepare or publicly disclose financial forecasts as to future financial performance, earnings or other results and is especially cautious of making financial forecasts due to the unpredictability of the underlying assumptions and estimates. However, in connection with the evaluation of a possible transaction involving the Company, the Company provided certain non-public forecasts that were prepared by Company management to the Company Board and to Evercore and BNP Paribas in their capacity as financial advisors to the Company, which we refer to as the “Company forecasts.”

A summary of the Company forecasts is not being included in this document to influence your decision whether to vote for or against the merger agreement proposal, but is being included because the Company forecasts were made available to the Company Board and Evercore and BNP Paribas. The inclusion of this information should not be regarded as an indication that the Company Board or its advisors or any other person considered, or now considers, these forecasts to be material or to be necessarily predictive of actual future results, and these forecasts should not be relied upon as such. The Company forecasts are subjective in many respects. There can be no assurance that the Company forecasts will be realized or that actual results will not be significantly higher or lower than forecasted. Because the forecasts cover multiple years, by their nature, they become subject to greater uncertainty with each successive year.

In addition, the Company forecasts were not prepared with a view toward public disclosure or toward complying with generally accepted accounting principles, which we refer to as GAAP, the published guidelines of the SEC regarding projections and the use of non-GAAP measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The Company forecasts include non-GAAP financial measures, including non-GAAP revenue, EBITDA and unlevered free cash flow, because the Company believed it could be useful in evaluating, on a prospective basis, the Company’s potential operating performance and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies. Neither our independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the financial forecasts, nor have they expressed any opinion or any other form of assurance on such information or its achievability.

These forecasts were based on numerous variables and assumptions that are inherently uncertain and may be beyond our control. The forecasts were prepared on the basis that the Company remained an independent, standalone public company, and do not contemplate the merger. We believe the assumptions that our management used as a basis for this projected financial information were reasonable at the time our management prepared these forecasts, given the information our management had at the time. Important factors that may affect actual results and cause these forecasts not to be achieved include, but are not limited to, risks and uncertainties relating to our business (including its ability to achieve strategic goals, objectives and targets over the applicable periods), industry performance, the regulatory environment, the impact of the COVID-19 pandemic, general business and economic conditions and other factors described or referenced under “Cautionary Statement Concerning Forward-Looking Information” beginning on page 15 of this proxy statement. In addition, the Company forecasts also reflect assumptions that are subject to change and do not reflect revised prospects for our business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the Company forecasts were prepared. Accordingly, there can be no assurance that these forecasts will be realized or that the Company’s future financial results will not materially vary from these forecasts.

No one has made or makes any representation to any stockholder regarding the information included in the Company forecasts set forth below. Readers of this proxy statement are cautioned not to place undue reliance on the projected financial information. Some or all of the assumptions which have been made regarding, among other things, the timing of certain occurrences or impacts, may have changed since the date such forecasts were made. We have not updated and do not intend to update, or otherwise revise, the Company forecasts to reflect

 

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circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions on which such forecasts were based are shown to be in error. We have made no representation to Vulcan or merger sub in the merger agreement concerning these forecasts.

The Company forecasts are forward-looking statements. For information on factors that may cause the Company’s future financial results to materially vary, see “Cautionary Statement Concerning Forward-Looking Information” on page 15.

The following is a summary of the Company forecasts prepared by Company management and provided to the Company Board and its advisors:

 

		Calendar Year Ending December 31
($ in mm)			2021E	(1)			2022E				2023E				2024E				2025E
Revenue		$	1,369			$	1,523			$	1,646			$	1,731			$	1,797
Adjusted EBITDA(2)		$	200			$	228			$	261			$	284			$	295

 

Note:

Unlevered free cash flows for the Company were calculated by the Company’s financial advisors, based on the Company forecasts, and approved by Company management for use by the Company’s financial advisors for purposes of their respective opinions and financial analyses.

Evercore calculated the estimated unlevered free cash flows for the Company, based on information provided by Company management, as Adjusted EBITDA less non-cash stock compensation expense, taxes, capital expenditures, certain other planned investments, changes in net working capital and contingent and deferred consideration in relation to certain acquisitions previously completed, for the second through fourth quarters of 2021 and for calendar years 2022 through 2025 in the amounts of $74, $51, $108, $128 and $134 million, respectively. Figures for the unlevered free cash flows calculated by Evercore took into account certain domestic and foreign deferred tax liabilities of the Company, as provided by Company management.

BNP Paribas calculated the estimated unlevered free cash flows for the Company, based on information provided by Company management, as after-tax earnings, plus depreciation and amortization, less capital expenditures, less change in net working capital, less after-tax stock-based compensation, less the Company’s investment in the Black Bear expansion, for the third and fourth quarters of 2021 and for calendar years 2022 through 2025 in the amounts of $45, $58, $115, $135 and $135 million, respectively, which amounts were approved by Company management for use by BNP Paribas for purposes of its opinion and financial analyses.

 

(1)	2021E Revenue and Adjusted EBITDA figures for the Company include the impact of cement shortages in the Central region, per Company management.

 

(2)

Adjusted EBITDA represents net income (loss), excluding the impact of income taxes, depreciation, depletion and amortization, net interest expense and certain other non-cash, non-recurring and/or unusual, non-operating items including, but not limited to: non-cash stock compensation expense, non-cash change in value of contingent consideration, acquisition-related costs, officer transition expenses, purchase accounting adjustments for inventory, and restructuring costs.

Financing of the Merger

On June 6, 2021, in connection with the execution of the merger agreement, Vulcan entered into a commitment letter (the “Commitment Letter”) for a $2.2 billion senior unsecured bridge loan (the “Bridge Loan”). On June 30, 2021, Parent entered into a $1.6 billion delayed draw term loan facility (the “DDTL Facility”), and substantially concurrently with entry into the DDTL Facility, terminated the Commitment Letter. The availability of the loans under the DDTL Facility are subject to certain conditions, which are substantially similar to the conditions under the Commitment Letter. At closing, Parent expects to use the proceeds of the loans under the DDTL Facility, together with cash on hand, to pay its obligations in respect of the merger agreement.

 

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Certain Effects of the Merger

If the merger agreement proposal receives the required approvals of the stockholders described elsewhere in this proxy statement and the other conditions to the closing of the merger are either satisfied or waived and the merger agreement is not otherwise terminated in accordance with its terms, merger sub will be merged with and into the Company upon the terms set forth in the merger agreement. As the surviving company in the merger, the Company will continue to exist following the merger as a wholly owned subsidiary of Parent.

The Company’s Amended and Restated Certificate of Incorporation (the “Company Charter”) and the Third Amended and Restated Bylaws, as amended (the “Company Bylaws”) will be amended as a result of the merger to be substantially the same as those of merger sub immediately prior to the effective time of the merger (except that the name of merger sub in its certificate of incorporation and bylaws will be changed to that of the Company and such certificate of incorporation and bylaws will include provisions related to elimination of liability, indemnification of officers, directors and employees and advancement of expenses that are set forth in the Company Charter and the Company Bylaws), and the certificate of incorporation and bylaws of the Company as so amended will be the certificate of incorporation and bylaws of the surviving company.

Following the merger, all of the common stock of the Company will be owned, beneficially and as of record, by Parent, and none of the current holders of the Company common stock will, by virtue of the merger, have any direct ownership interest in, or be a stockholder of, the Company, the surviving company or Parent. As a result, the holders of the Company common stock will no longer benefit from any increase in the value, nor will they bear the risk of any decrease in the value, of the Company common stock. Following the merger, Parent will benefit from any increase in the Company’s value and also will bear the risk of any decrease in the Company’s value.

Upon consummation of the merger, each share of Company common stock issued and outstanding immediately prior to the effective time of the merger (other than cancelled shares, dissenting shares and converted shares (each as defined in “The Merger Agreement—Consideration to be Received in the Merger”)) will be converted into the right to receive the merger consideration and all shares of Company common stock so converted will, at the effective time, be canceled. Please see the section of this proxy statement entitled “The Merger Agreement—Consideration to be Received in the Merger.”

For information regarding the effects of the merger on the Company’s outstanding equity awards, please see the sections entitled “The Merger Agreement—Treatment of Company RSU Awards” and “Interests of the Company’s Directors and Executive Officers in the Merger.”

The Company common stock is currently registered under the Exchange Act and trades on Nasdaq under the symbol “USCR.” Following the consummation of the merger, shares of Company common stock will no longer be traded on Nasdaq or any other public market. In addition, the registration of the Company common stock under the Exchange Act will be terminated, and the Company will no longer be required to file periodic and other reports with the SEC with respect to the Company common stock or otherwise. Following termination of registration of the Company common stock under the Exchange Act, the Company will no longer be required to furnish certain information to the Company’s stockholders and the SEC, and the provisions of the Exchange Act, such as the requirement to file annual and quarterly reports pursuant to Section 13(a) or 15(d) of the Exchange Act, the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with stockholders’ meetings pursuant to Section 14(a) of the Exchange Act, will become inapplicable to the Company. Parent will become the beneficiary of the cost savings associated with the Company’s no longer being subject to the reporting requirements under the federal securities laws.

Effects on the Company if the Merger is not Consummated

In the event that the merger agreement proposal does not receive the required approvals of the stockholders described elsewhere in this proxy statement, or if the merger is not completed for any other reason, the

 

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Company’s stockholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company expects that its management will operate the Company’s business in a manner similar to that in which it is being operated today and the Company will remain an independent public company, the Company common stock will continue to be listed and traded on Nasdaq, the Company common stock will continue to be registered under the Exchange Act and the Company’s stockholders will continue to own their shares of the Company common stock and will continue to be subject to the same general risks and opportunities as they currently are with respect to ownership of the Company common stock.

If the merger is not completed, there can be no assurances as to the effect of these risks and opportunities on the future value of your shares of Company common stock, including the risk that the market price of the Company common stock may decline to the extent that the current market price of the Company common stock reflects a market assumption that the merger will be completed. If the merger is not completed, there can be no assurances that any other transaction acceptable to the Company will be offered or that the business, operations, financial condition, earnings or prospects of the Company will not be adversely impacted or that stockholders will ever receive a control premium for their shares. Pursuant to the merger agreement, under certain circumstances the Company is permitted to terminate the merger agreement in order to enter into an alternative transaction. Please see the section of this proxy statement entitled “The Merger Agreement—Termination of the Merger Agreement.”

Under certain circumstances, if the merger is not completed, the Company may be obligated to pay to Parent a termination fee. Please see the section of this proxy statement entitled “The Merger Agreement—Termination Fee Payable by the Company.”

Interests of the Company’s Directors and Executive Officers in the Merger

The Company’s directors and executive officers have interests in the merger that are in addition to, or different from, the interests of other stockholders. The Company Board was aware of these interests and considered them, among other matters, in evaluating and approving the merger agreement and the merger, and in recommending the approval of the merger agreement proposal, the non-binding named executive officer compensation proposal, and the adjournment proposal to the Company’s stockholders. These interests are described in further detail below.

Certain of the Company’s directors and executive officers hold Company RSU Awards. For details on these holdings for each of the Company’s named executive officers, see the “Named Executive Officer Merger-Related Compensation” table below.

Treatment of Company RSU Awards

In connection with the completion of the merger and subject to the terms of the merger agreement, each outstanding and unvested Company RSU Award will become vested and be settled in cash, without interest, in an amount equal to $74.00 per share. The number of shares of Company common stock subject to any portion of any Company RSU Award that vests based on achievement of pre-established performance criteria that will be settled in cash as described in the preceding sentence will be determined in accordance with the terms of the applicable Company RSU Award agreement and, to the extent applicable, any other written agreement between the Company and the holder of the Company RSU Award.

As of June 28, 2021, the Company’s executive officers held Company RSU Awards covering an aggregate of 177,424 shares of Company common stock (after taking into account the vesting acceleration provisions applicable to the applicable Company RSU Awards subject to performance-based vesting) and the Company’s non-employee directors held Company RSU Awards covering an aggregate of 13,266 shares of Company common stock.

 

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Estimate of Amounts Payable for the Company RSU Awards

If the effective time occurred on June 28, 2021, the aggregate Company RSU Award cash out amount that would be payable to the Company’s executive officers would have been $13,129,376, and the aggregate Company RSU Award cash out amount that would be payable to the Company’s non-employee directors would have been $981,684. For information on the amounts that would have been payable to each of the Company’s named executive officers in respect of their Company RSU Awards, see the “Named Executive Officer Merger-Related Compensation” table below.

Executive Severance Agreements

Each of the Company’s executive officers are parties to executive severance agreements with the Company. Each executive severance agreement provides for severance payments and other benefits following termination of the applicable officer’s employment under various scenarios. The merger will be considered a change in control for purposes of the executive severance agreements. Under the executive severance agreements, in the event there is a change in control and within one year thereafter the officer’s employment (two years in the case of Mr. Pruitt) is terminated by the Company or any successor without cause or by the officer for good cause, the officer will be entitled to the following severance benefits:

 

•

a lump sum payment in cash equal to: (a) the sum of (1) the officer’s monthly base salary in effect on the termination date multiplied by 12, and (2) the amount of the officer’s full target bonus for the bonus year in which termination occurs, multiplied by (b) in the case of Mr. Pruitt, 2.5, and in the case of the other executive officers, 2.0;

 

•

a lump-sum payment in cash equal to the value of the officer’s accrued but unpaid salary through the date of such termination, plus the officer’s unused vacation days for the year in which the termination occurs; and

 

•

payment of all applicable medical continuation premiums for continuation coverage under COBRA for the benefit of the officer (and his covered dependents as of the date of his termination, if any) under the officer’s then-current plan election for 18 months after termination.

Under each executive severance agreement, the Company would have “cause” to terminate the applicable officer’s employment in the event of: (i) the officer’s gross negligence, willful misconduct or willful neglect in the performance of the officer’s material duties and services to the Company; (ii) the officer’s final conviction of a felony by a trial court, or the officer’s entry of a plea of nolo contendere to a felony charge; (iii) any criminal indictment of the officer relating to an event or occurrence for which the officer was directly responsible which, in the business judgment of a majority of the Company Board, exposes the Company to ridicule, shame or business or financial risk; or (iv) a material breach by the officer of any material provision of the executive severance agreement.

Under each executive severance agreement, the officer would have “good cause” to terminate employment if there is: (i) a material diminution in the officer’s then-current monthly base salary; (ii) a material change in the location of the officer’s principal place of employment by the Company; (iii) any material diminution in the officer’s current position at the time the executive severance agreement was entered into or any title or position to which the officer has since been promoted; or (iv) any material diminution of the officer’s authority, duties or responsibilities from those commensurate and consistent with the character, status and dignity appropriate to the officer’s current position at the time the executive severance agreement was entered into or any title or position to which the officer has been promoted, provided, however, that if at any time the officer ceases to have such duties and responsibilities because the Company ceases to have any securities registered under Section 12 of the Exchange Act or ceases to be required to file reports under Section 15(d) of the Exchange Act, then the officer’s authority, duties and responsibilities will not be deemed to have been materially diminished solely due to the cessation of such publicly traded company duties and responsibilities; or (v) any material breach by the Company of any material provision of the executive severance agreement, including any failure by the Company to pay any amount due under the executive severance agreement.

 

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Each officer is subject to obligations pertaining to noncompetition and nonsolicitation of customers and employees during employment and for a period of 24 months (30 months for Mr. Pruitt) following termination of employment that entitles such officer to receive the change in control severance. The officers are also subject to perpetual confidentiality and nondisparagement obligations.

Following the Merger

At the effective time, the directors of merger sub will be the directors of the surviving company and the officers of merger sub immediately prior to the effective time will be the officers of the surviving company, in each case, until the earlier of their resignation or removal or until their successors are duly elected and qualified, subject to the surviving company’s certificate of incorporation and bylaws and the DGCL.

Indemnification, Exculpation and Insurance

Under the merger agreement, Parent agreed that the Company’s current and former directors and officers will be indemnified and held harmless for six years following the effective time, and will be entitled to the advancement of expenses, to the fullest extent permitted under applicable law and the Company Charter and Company Bylaws for acts or omissions occurring at or prior to the effective time. In addition, at or prior to the effective time, the Company will cause the surviving company to obtain and pay the premium for a six year prepaid non-cancelable “tail policy” providing directors’ and officers’ liability insurance on terms that are no less favorable than the coverage provided under the Company’s existing policies, with respect to matters arising at or prior to the effective time (subject to a 300% cap on the cost of such insurance as compared to premiums paid in the 2021 fiscal year). For more information, see “The Merger Agreement—Directors’ and Officers’ Indemnification and Insurance.”

New Arrangements

As of the date of this proxy statement, none of the Company’s directors or executive officers have entered into any amendments or modifications to their existing or any new employment, compensation or other agreements or arrangements with the Company in connection with the merger, nor have they entered into any such agreements or arrangements with Parent or its affiliates. The merger is not conditioned upon any director or executive officer of the Company entering into any such agreements or arrangements.

It is possible that the Company’s employees, including executive officers, will enter into new compensation arrangements with Parent or its affiliates. Such arrangements may include agreements regarding future terms of employment or the right to receive retention awards. As of the date of this proxy statement, no compensation arrangements between such persons and Parent and/or its affiliates have been established or discussed with any of the Company’s employees.

Post-Closing Compensation and Employee Benefits

The merger agreement provides that Parent will provide, or cause the surviving company to provide, to any continuing employee, the compensation and benefits described under “The Merger Agreement—Employee Benefits Matters.”

Named Executive Officer Merger-Related Compensation

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of the Company’s named executive officers that is based on or otherwise relates to the merger, which is referred to as “golden parachute” compensation by the applicable SEC disclosure rules. The individuals disclosed within this section and referred to as the “named executive officers” are the Company’s current President and Chief Executive Officer; Senior Vice President and Chief Financial Officer; Senior Vice

 

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President, General Counsel and Corporate Secretary; Regional Vice President and General Manager – U.S. Concrete – Central; and Regional Vice President and General Manager – U.S. Concrete – East for the Company’s 2021 fiscal year.

The amounts set forth in the table are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement and in the footnotes to the table. As a result, the actual amounts, if any, that a named executive officer will receive may materially differ from the amounts set forth in the table. The calculations in the table below do not include amounts the Company’s named executive officers were already entitled to receive or vested in as of the date hereof or amounts under contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of executive officers and that are available generally to all the salaried employees of the Company.

The table below assumes that (i) the effective time will occur on June 28, 2021, (ii) the employment of the named executive officer will be terminated on such date in a manner entitling the named executive officer to receive severance payments and benefits under the terms of the executive severance agreements described under “Executive Severance Agreements”, (iii) the named executive officer’s base salary remains unchanged from those in place as of April 1, 2021, (iv) no named executive officer receives any additional equity grants to acquire common stock of the Company on or prior to the effective time and (v) no named executive officer enters into new agreements or is otherwise legally entitled to, prior to the effective time, additional compensation or benefits. For a narrative description of the terms and conditions applicable to the payments quantified in the table below, see the full “Interests of the Company’s Directors and Executive Officers in the Merger” section.

Potential Change in Control Payments to Named Executive Officers

 

Name		Cash ($)(1)				Equity ($)(2)				Perquisites/Benefits ($)				Total ($)
Ronnie Pruitt			4,394,712				4,225,400				30,796				8,650,908
John E. Kunz			1,694,088				2,063,416				26,635				3,784,139
Paul M. Jolas			1,366,546				1,349,760				19,573				2,735,879
Jeffrey W. Roberts			1,169,862				1,050,504				36,470				2,256,836
Matthew Emmert			1,101,046				987,456				36,470				2,124,972

 

(1)

Reflects double trigger cash severance payments that the executive would be entitled to receive upon a termination of the executive’s employment by the Company without cause or by the executive for good cause within one year (two years in the case of Mr. Pruitt) following the closing of the merger pursuant to the executive severance agreements described under “Executive Severance Agreements” above.

(2)	Reflects the gross amount of single trigger payments to be made in connection with the cancellation of outstanding and unvested Company RSU Awards held by each executive as of the effective time as described under “Treatment of Company RSU Awards” above.

(3)	Reflects the estimated cost of Company-paid COBRA coverage for the benefit of the executive (and his covered dependents) for 18 months after termination.

Any amounts shown in the table above that are subject to the golden parachute excise tax under Section 4999 of the Code (as defined below) may be subject to reduction to the extent such reduction would result in the named executive officer retaining a greater after-tax amount of such payment.

Certain U.S. Federal Income Tax Consequences of the Merger

The following is a general discussion of certain U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of Company common stock who hold their stock as a capital asset within the meaning of section 1221 of the Internal Revenue Code of 1986, which we refer to as the Code. This discussion does not

 

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address U.S. federal income tax consequences with respect to holders other than U.S. holders. This discussion is based on the Code, the U.S. Treasury Department regulations issued under the Code, which we refer to as the Treasury Regulations, and administrative rulings and court decisions in effect as of the date of this proxy statement, all of which are subject to change or differing interpretations at any time, possibly with retroactive effect. Any such change or interpretation could affect the accuracy of the statements and conclusions set forth herein. This discussion is not binding on the Internal Revenue Service, which we refer to as the IRS, or a court and there can be no assurance that the tax consequences described in this discussion will not be challenged by the IRS or that they would be sustained by a court if so challenged. No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the merger.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Company common stock that is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation) created or organized under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.

This discussion is not a complete description of all of the U.S. federal income tax consequences of the merger and, in particular, does not address U.S. federal income tax considerations applicable to U.S. holders of Company common stock who are subject to special treatment under U.S. federal income tax law including, for example, partnerships (or entities or arrangements treated as partnerships for U.S. federal income tax purposes) and partners therein, financial institutions, dealers in securities, insurance companies, securities or currency dealers, traders in securities who elect to use the mark-to-market method of accounting, holders that hold, directly or constructively (or that held, directly or constructively, at any time during the five-year period ending on the date of the merger) 5% or more of the outstanding Company common stock, tax-exempt investors, S corporations, holders whose functional currency is not the U.S. dollar, tax-deferred or other retirement accounts, U.S. expatriates, former long-term residents of the United States, holders who acquired Company common stock pursuant to the exercise of an employee stock option or right or otherwise as compensation, and holders who hold Company common stock as part of a hedge, straddle, constructive sale, conversion transaction, or other integrated investment. Also, this discussion does not address U.S. federal income tax considerations applicable to a holder of Company common stock who exercises appraisal rights under the DGCL. In addition, no information is provided with respect to the tax consequences of the merger under any U.S. federal law other than income tax laws (including, for example the U.S. federal estate, gift, Medicare, and alternative minimum tax laws), or any applicable state, local, or foreign tax laws. This discussion does not address the impact of Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative guidance promulgated thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith (commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA”). This discussion does not address the tax consequences of any transaction other than the merger.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Company common stock, the tax treatment of a partner in such a partnership generally will depend on the status of the partner and the activities of the partnership. Any entity treated as a partnership for U.S. federal income tax purposes that holds Company common stock, and any partners in such partnership, should consult their own independent tax advisors regarding the tax consequences of the merger to their specific circumstances.

The tax consequences of the merger will depend on a holder’s specific situation. Holders should consult their tax advisors as to the tax consequences of the merger relevant to their particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, non-U.S. or other tax laws and of changes in those laws.

 

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The receipt of cash by U.S. holders in exchange for shares of Company common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of Company common stock pursuant to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (i) the amount of cash received in the merger and (ii) the U.S. holder’s adjusted tax basis in its Company common stock exchanged therefor.

A U.S. holder’s adjusted tax basis in its shares of Company common stock will generally equal the price the U.S. holder paid for such shares. If a U.S. holder’s holding period in the shares of Company common stock surrendered in the merger is greater than one year as of the date of the merger, the gain or loss generally will be long-term capital gain or loss. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates currently, which rates are subject to change. The deductibility of a capital loss recognized on the exchange may be subject to limitations. If a U.S. holder acquired different blocks of Company common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of Company common stock.

Information Reporting and Backup Withholding

Payments of cash to a U.S. holder of Company common stock pursuant to the merger may, under certain circumstances, be subject to information reporting and backup withholding, unless the U.S. holder provides proof of an applicable exemption or furnishes its correct taxpayer identification number, and otherwise complies with all applicable requirements of the backup withholding rules. In addition, if the paying agent is not provided with a U.S. holder’s correct taxpayer identification number or other adequate basis for exemption, the U.S. holder may be subject to certain penalties imposed by the IRS. Certain holders (such as corporations) are exempt from backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

Holders of Company common stock should consult their own tax advisors with respect to the tax consequences of the merger in their particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, non-U.S. or other tax laws and of changes in those laws.

Litigation Related to the Merger

As of the date of this proxy statement, no stockholder litigation related to the merger agreement has been brought against the Company or any members of the Company Board.

Regulatory Approvals

Under the terms of the merger agreement, the merger cannot be consummated until the applicable waiting period (and any extension thereof) under the HSR Act has expired or been terminated.

Under the HSR Act and the rules promulgated thereunder by the FTC, the merger cannot be consummated until each of the Company and Parent files a notification and report form with the FTC and the Antitrust Division of the DOJ under the HSR Act and the applicable waiting period has expired or been terminated. Each of the Company and Parent filed such a notification and report form on June 21, 2021.

If the FTC or DOJ issues a request for additional information and documents (which we refer to as the “Second Request”) prior to the expiration of the initial waiting period, the parties must observe a second 30-day waiting period, which would begin to run only after both parties have substantially complied with the Second Request, unless the waiting period is terminated earlier or the parties otherwise agree to extend the waiting period.

 

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At any time before or after consummation of the merger, notwithstanding the termination of the waiting period under the HSR Act, the Antitrust Division of the DOJ or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, or part of it, seeking divestiture of substantial assets of the Company or Parent, requiring the Company or Parent to license, or hold separate, assets or terminating existing relationships and contractual rights. At any time before or after the consummation of the merger, and notwithstanding the termination of the waiting period under the HSR Act, state attorneys general and other regulators could take such action under state law or the antitrust laws of the United States, as they deem necessary or desirable in the public interest. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the Company or Parent. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

There can be no assurance that the regulatory clearances and approvals described above will be obtained and, if obtained, there can be no assurance as to the timing of any approvals, the ability of the parties to obtain the approvals on satisfactory terms or the absence of any litigation challenging such approvals. There can also be no assurance that the DOJ, the FTC, or any other governmental entity or any private party will not attempt to challenge the merger and, if such a challenge is made, there can be no assurance as to its result.

 

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THE MERGER AGREEMENT

Explanatory Note Regarding the Merger Agreement

The following is a summary of certain material terms of the merger agreement and is qualified in its entirety by reference to the complete text of the merger agreement, which is included as Annex A to this proxy statement and is incorporated herein by reference in its entirety. This summary is not intended to provide you with any other factual information about the Company, Parent or merger sub. You are urged to read the merger agreement carefully and in its entirety as well as this proxy statement before making any decisions regarding the merger.

The merger agreement contains representations and warranties by each of the parties to the merger agreement. These representations and warranties have been made solely for the benefit of the other parties to the merger agreement; have been made only for purposes of the merger agreement; have been qualified by certain documents filed with, or furnished to, the SEC by the Company or by Parent; have been qualified by confidential disclosures made to the Company or Parent and merger sub, as applicable, in connection with the merger agreement; are subject to materiality qualifications contained in the merger agreement that may differ from what may be viewed as material by investors; were made only as of the date of the merger agreement or such other date as is specified in the merger agreement; and have been included in the merger agreement for the purpose of allocating risk between the Company, on the one hand, and Parent and merger sub, on the other hand, rather than establishing matters as facts.

You should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Parent or merger sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in the Company’s or Parent’s public disclosures. Accordingly, the representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read together with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement. See “Where You Can Find More Information” beginning on page 91 of this proxy statement.

Structure of the Merger

At the effective time of the merger, subject to the satisfaction or waiver of the conditions set forth in the merger agreement, merger sub will be merged with and into the Company, whereupon the separate existence of merger sub will cease, with the Company surviving the merger. Following the merger, the Company will be a wholly owned subsidiary of Parent. The certificate of incorporation and the bylaws of merger sub as in effect immediately prior to the effective time will be the certificate of incorporation and bylaws, respectively, of the surviving company; provided that the name of the surviving company will be “U.S. Concrete, Inc.” Unless otherwise determined by Parent prior to the effective time of the merger, the directors and officers of merger sub immediately prior to the effective time of the merger, from and after the effective time of the merger, will be the initial directors and officers of the surviving company until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

Closing and Effective Time of the Merger

Unless otherwise mutually agreed by the Company and Parent, the closing of the merger will take place at 8:00 a.m., New York City time, on the third business day following the satisfaction or, to the extent permitted by applicable law, waiver of the last of the conditions set forth in the merger agreement and described in the section entitled “ —Conditions to Completion of the Merger” (other than any such conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions at the closing).

 

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The merger will become effective at such date and time as the certificate of merger is duly filed with the Secretary of State of the State of Delaware or on such later date and time as may be agreed by the Company and Parent and specified in the certificate of merger.

As of the date of this proxy statement, we expect to complete the merger in the second half of calendar year 2021. However, completion of the merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to the completion of the merger, which are described below and include regulatory clearances and approvals, and it is possible that factors outside the control of the Company or Parent could delay the completion of the merger, or prevent it from being completed at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required approvals.

Consideration To Be Received in the Merger

At the effective time, each share of Company common stock issued and outstanding immediately prior to the effective time (other than cancelled shares, dissenting shares and converted shares (each as defined below)) will be converted into the right to receive $74.00 in cash, without interest, less any applicable withholding taxes. At the effective time, all such shares of Company common stock will cease to be outstanding, will be automatically cancelled and will cease to exist, and each applicable holder of such shares of Company common stock will thereafter only have the right to receive the merger consideration therefor upon the surrender of such shares.

At the effective time, each share of Company common stock that is, immediately prior to the effective time, owned or held in treasury by the Company or is owned by Parent or merger sub (collectively, the “cancelled shares”) will automatically be cancelled and retired and will cease to exist, and no consideration or payment will be delivered in exchange therefor or in respect thereof. In addition, any shares of Company common stock issued and outstanding immediately prior to the effective time that are owned by any direct or indirect wholly owned subsidiary of Parent (other than merger sub) or of the Company (the “converted shares”) will be converted into such number of shares of common stock of the surviving company such that the ownership percentage of any such subsidiary in the surviving company will equal the ownership percentage of such subsidiary in the Company immediately prior to the effective time.

Shares of Company common stock issued and outstanding immediately prior to the effective time (other than cancelled shares and converted shares) and held by a holder who did not vote in favor of the adoption of the merger agreement and has properly exercised appraisal rights in respect of such shares in accordance with Section 262 of the DGCL (the “dissenting shares”) will not be cancelled and converted into the right to receive the merger consideration. Such stockholders will instead be entitled to the appraisal rights granted by Section 262 of the DGCL, as described in the section entitled “Appraisal Rights” and Annex D of this proxy statement.

Each share of common stock of merger sub issued and outstanding immediately prior to the effective time will be converted into one share of common stock of the surviving company.

Procedures for Surrendering Shares for Payment

Parent will deposit, or will cause to be deposited, with a paying agent selected by Parent and reasonably acceptable to the Company, for the benefit of the holders of Company common stock and pursuant to a paying agent agreement, the terms of which will be reasonably acceptable to the Company, cash in immediately available funds in an amount sufficient for the paying agent to make the payment of the merger consideration to Company stockholders.

Promptly after the effective time, the paying agent will mail to each holder of record of a certificate which immediately prior to the effective time represented outstanding shares of Company common stock (other than cancelled shares, dissenting shares and converted shares) a letter of transmittal and instructions for effecting the surrender of the certificates in exchange for the amount to which such stockholder is entitled as a result of the

 

59

merger pursuant to the merger agreement. Upon surrender of a certificate representing shares of Company common stock for cancellation to the paying agent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto and such other documents as may be required pursuant to such instructions, the holder of such certificate will be entitled to receive in exchange therefor the merger consideration for each share of Company common stock formerly represented by such certificate.

In the event that any certificate representing shares of Company common stock has been lost, stolen or destroyed, the paying agent will issue in exchange for such lost, stolen or destroyed certificate, upon the making of an affidavit of that fact by the holder thereof and, if required by Parent, an indemnity bond, the merger consideration payable in respect thereof.

Holders of book-entry shares of Company common stock will not be required to deliver certificates representing shares of Company common stock or an executed letter of transmittal to the paying agent to receive the merger consideration, and will instead automatically be entitled to receive the merger consideration at the effective time of the merger.

No interest will be paid or accrued on any portion of the merger consideration payable upon surrender of certificates representing shares of Company common stock (or affidavits of loss in lieu thereof) or in respect of any book-entry shares. Following the first anniversary of the effective time, Parent will be entitled to require the paying agent to deliver to it any undisbursed funds (including any interest received with respect thereto) remaining in the payment fund, and thereafter holders of certificates or book-entry shares representing shares of Company common stock will be entitled to look only to Parent with respect to the merger consideration payable upon due surrender of their certificates or book-entry shares.

As of the effective time of the merger, the share transfer books of the Company with respect to the shares of Company common stock will be closed and thereafter there will be no further registration of transfers of shares of the Company.

Treatment of Company RSU Awards

At the effective time of the merger, pursuant to the applicable Company stock incentive plan, each Company RSU Award that is outstanding and unvested immediately prior to the effective time of the merger will become vested and be settled in cash, without interest, in an amount equal to (x) the number of shares subject to the applicable RSU award, multiplied by (y) the $74.00 per share merger consideration, less any applicable tax withholding. The number of shares of Company common stock subject to any portion of any Company RSU Award that vests based on achievement of pre-established performance criteria will be determined in accordance with the terms of the applicable Company RSU Award agreement and, to the extent applicable, any other written agreement between the Company and the holder of the Company RSU Award.

Withholding

Each of the paying agent, the Company, Parent, merger sub and the surviving company will be entitled to deduct and withhold from amounts otherwise payable pursuant to the merger agreement any amounts as are required to be deducted or withheld with respect to such payment under the Code or any other applicable tax law. To the extent that amounts are deducted or withheld, and timely remitted to the appropriate governmental entity, such amounts will be treated as having been paid to the person in respect of which such deduction or withholding was made.

Representations and Warranties

The Company’s representations and warranties to Parent and merger sub in the merger agreement relate to, among other things:

 

•

the organization, good standing and qualification of each of the Company and its subsidiaries;

 

60

•

the capital structure of the Company and its subsidiaries;

 

•

the corporate power and authority to execute, deliver and perform its obligations under the merger agreement and to consummate the transactions contemplated by the merger agreement;

 

•

the absence of conflicts with the Company’s organizational documents, applicable law or contracts to which the Company or any of its subsidiaries is a party;

 

•

the forms, reports, statements and documents required to be filed with the SEC and the accuracy of the information contained in those documents, as well as compliance with the Sarbanes-Oxley Act of 2002, as amended;

 

•

the financial statements of the Company and the Company’s internal system of disclosure controls and procedures concerning financial reporting;

 

•

the absence of certain undisclosed liabilities;

 

•

the absence of certain changes or events;

 

•

compliance with certain laws and permits, including environmental laws and employee benefits and labor laws, by the Company and its subsidiaries;

 

•

employee benefits plans and other agreements, plans and policies with or concerning employees of the Company and its subsidiaries;

 

•

labor matters related to the Company and its subsidiaries;

 

•

tax matters;

 

•

the absence of certain material litigation, actions, proceedings, orders, judgments or investigations;

 

•

intellectual property;

 

•

privacy and data protection;

 

•

real property of the Company and its subsidiaries;

 

•

certain material contracts of the Company and its subsidiaries;

 

•

environmental matters related to the Company and its subsidiaries;

 

•

customers and suppliers of the Company and its subsidiaries;

 

•

insurance coverage;

 

•

the accuracy of information included in this proxy statement;

 

•

receipt of the opinion of Evercore and BNP Paribas with respect to the fairness of the merger consideration;

 

•

inapplicability of takeover statutes;

 

•

inventory;

 

•

the absence of certain related party transactions;

 

•

brokers’ and finders’ fees and other expenses payable by the Company;

 

•

COVID-19 matters; and

 

•

acknowledgment that Parent and merger sub make no representations other than those included in the merger agreement.

Parent’s and merger sub’s representations and warranties to the Company in the merger agreement relate to, among other things:

 

•

the organization, good standing and qualification of each of Parent and merger sub;

 

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