Astec is expanding its concrete batch plant business with the acquisition of plant manufacturers Concrete Equipment Company and BMH Systems.
Astec says it bought the companies, which have combined 2019 sales of $50 million, with cash on hand, but did not disclose the terms. The company also reported second-quarter earnings August 5, showing a net sales decline of 13 percent compared to 2Q 2019.
“The addition of these highly regarded brands, along with our existing RexCon brand of concrete products, will significantly strengthen our ability to serve our customers’ needs,” says Astec CEO Barry A. Ruffalo. “… By bringing these product lines together, our global customers will have access to the most robust line of concrete products in the infrastructure industry. … These acquisitions also reflect our disciplined capital allocation process, and we maintain significant financial flexibility as we continue to effectively manage our operations in this unprecedented environment.”
Concrete Equipment Company, or CON-E-CO, manufactures portable and stationary concrete batch plants, mixers, material handling systems and dust control. The company is based in Blair, Nebraska, and has been in business for more than 60 years.
BMH Systems manufactures concrete batch plants, paste back-fill plants for the mining sector and bagging plants. It also designs and builds custom batch plants for large infrastructure projects. The 41-year-old company is based in Montreal, Canada.
Astec has been focusing its attention on its infrastructure, aggregates and mining equipment segments and shedding its drilling and wood processing businesses.
In its second-quarter financial report, the company said orders for its infrastructure business were down 31 percent and orders for the aggregates and mining businesses were down 17 percent. Ruffalo said the company continues to weather the pandemic with a strong balance sheet and cash position.
“While we remain cautious given the global pandemic, we are well positioned to navigate the economic challenges ahead of us with a more efficient and streamlined organizational structure, a strong balance sheet and ample liquidity,” he said.
Astec ended the quarter with a net cash position of $119.8 million and total debt of $1.4 million. The company says it has available liquidity of $270.6 million, as of June 30.
Astec also reports it has reduced its workforce by 15 percent since 2Q 2019. It has suspended all hiring except for critical positions. It recently closed its Telsmith plant in Mequon, Wisconsin, and moved its production to other plants. Telsmith produces crushers, screens, feeders and plants for the mining, aggregates, recycling and industrial industries.