Arcosa, Inc. (NYSE: ACA) recently acquired the construction materials business of Stavola Holding Corporation and its affiliated entities (Stavola) for $1.2 billion.

This apart, ACA completed the previously announced sale of its steel components business on Aug. 16, 2024.

Buyout Synergies

The acquisition was funded with a $600 million 6.875% Senior Note issuance (due 2032), which closed on Aug. 26, 2024, and a pre-payable $700 million variable-rate senior secured Term Loan B Facility (due 2031), which was funded concurrently with the closing of the transaction. Excess cash proceeds will be used to pay down borrowings on the company's revolving credit facility.

For third-quarter 2024, the company expects adjusted EBITDA to be within $1-$1.5 million loss, reflecting a partial period of ownership that was impacted by the deferral of certain product shipments and business interruption from actions necessary to complete the divestiture process. Moreover, Arcosa plans to update its 2024 revenue and adjusted EBITDA guidance for the completion of these transactions at third-quarter earnings release.

The company anticipates deploying strong free cash flow to return to its net leverage target of 2.0-2.5X within 18 months.

About Stavola

Founded in 1948, Stavola is an aggregates-led and vertically integrated construction materials company. It primarily serves the New York-New Jersey Metropolitan Statistical Area through its network of five hard ...

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