Under the terms of the Agreement and Plan of Merger, dated November 24, 2024, each share of Summit Class A and Class B common stock was converted into the right to receive $52.50 per share in cash. That price represented an approximately 36 percent premium to Summit's unaffected 90-day volume-weighted average price and an approximately 29 percent premium to Summit's unaffected closing share price of $40.62 on October 23, 2024, the last trading day before Summit's disclosure that it had received a non-binding acquisition proposal. In fairness-opinion work prepared for Summit's board, Morgan Stanley selected a reference range of 11.0x to 13.0x AV/LTM EBITDA (based on a precedent-transaction median of 12.0x), and Evercore separately selected a reference range of 11.0x to 13.0x TEV/LTM Adjusted EBITDA, both applied to Summit's estimated EBITDA.
The transaction combines Summit's aggregates, cement and ready-mix concrete businesses with Quikrete's concrete and cement-based products business. Summit Materials President and CEO Anne Noonan said the deal "is a testament to our stellar strategic and financial performance, agile operational and commercial execution, and to the strength and talent of our entire team who have delivered a 34.6% annualized return since we began to develop our Elevate strategy on September 1, 2020," adding that in Quikrete "we have found a strong partner that shares our commitment to safety and innovation." Quikrete CEO Will Magill said the deal "represents a significant milestone in our journey to expand our capabilities and geographic presence," calling Summit "a recognized leader with a highly complementary portfolio of trusted aggregate, cement and ready-mix solutions." Summit Chairman Howard Lance said the board "carefully considered a range of alternatives and determined that this transaction is the best way to maximize value for our shareholders."
According to Summit's merger proxy, Quikrete's outreach began in September 2024 and its first written proposal, delivered September 25, 2024, offered $48.00 per share in cash. Summit's board initially determined that offer did not provide sufficient value. Quikrete subsequently raised its proposal to $50.00 per share (mid-October 2024), then $51.50 per share, before Summit's board countered at $52.50 per share, which Quikrete's CEO verbally accepted in mid-November 2024, leading to the signed agreement on November 24, 2024. Summit's largest shareholder, Cementos Argos S.A. (together with affiliates Argos SEM LLC and Valle Cement Investments, Inc.), signed a voting agreement committing to vote its shares in favor of the merger.
Quikrete financed the cash consideration with new debt and cash on hand. Concurrently with signing, Quikrete obtained a debt commitment letter for term debt financing of up to $9.2 billion, including up to $6.7 billion in bridge financing, together with a committed asset-based revolving credit facility of up to $1.5 billion. The debt proceeds were earmarked for funding the merger consideration, paying transaction fees and expenses, and repaying Summit's existing credit agreement and bond indebtedness. Receipt of financing was not a condition to Quikrete's obligation to close, and Wells Fargo provided the debt financing commitment. No synergy dollar figure, accretion/dilution estimate, or post-closing leverage ratio was disclosed in the filings reviewed.
Closing conditions included approval by a majority of Summit's outstanding shares entitled to vote, expiration of the HSR Act waiting period, approval under the Competition Act (Canada), and other customary regulatory clearances and absence of a legal restraint. At a February 5, 2025 special meeting, holders of 153,789,021 shares (approximately 87.47% of the 175,814,122 shares outstanding as of the December 27, 2024 record date) were present or represented, constituting a quorum, and stockholders approved the merger agreement proposal. The merger agreement specified an outside date of August 24, 2025 (subject to extension for regulatory approvals or a financing marketing period), which was not needed since the deal closed February 10, 2025. The agreement provided for a termination fee of $279,000,000 payable by Summit to Quikrete under specified circumstances, including if Summit's board changed its recommendation or accepted a superior proposal.
Wells Fargo served as exclusive financial advisor to Quikrete, with Troutman Pepper Locke LLP (named Troutman Pepper Hamilton Sanders LLP at signing) and Covington & Burling LLP as legal counsel to Quikrete. Morgan Stanley & Co. LLC and Evercore served as financial advisors to Summit, with Davis Polk & Wardwell LLP as Summit's legal advisor.