HEALTHY M&A MARKET CONTINUES FORAGGREGATES PLAYERSROCK PRODUCTS INDUSTRY UPDATE | OCTOBER 2021 3
TABLE OF CONTENTS Key Industry Takeaways 4 Introduction 5 Public Company Commentary 5 Aggregates Materials Index Keeps Pace with Broader Market 6 Robust Construction Spending to Drive Aggregates Demand 6 M&A Valuations Elevated Through Year-to-Date 7 Private Equity Activity 7 Public Companies Bolster Market Share and Margins 8 Select Transactions 9 Company Spotlights 10 Construction Materials Update 12 Aggregate Materials Update 13 Firm Track Record 15 Report Contributors 16 Endnotes 17Contact Our Building Products &Construction Services Experts Darin Good Managing Director 303-549-5674 dgood@capstonepartners.com Crista Gilmore Director 303-531-5013 cgilmore@capstonepartners.com Brian Krehbiel Director 970-215-9572 bkrehbiel@capstonepartners.com
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Rock Products IndustryHealthy M&A Market Continues for Aggregates PlayersKEY INDUSTRY TAKEAWAYSCapstone Partners’ Building Products & Construction Services Team is pleased to share its Rock Productsreport. The Aggregates industry has benefited from healthy production and pricing, despite labor shortagesand select cost headwinds challenging industry players. Merger and acquisition (M&A) activity continues tosurge with strategic buyers actively consolidating to bolster capabilities and enhance geographic exposure.Several key report takeaways are included below: 1. Leading public companies have demonstrated healthy performance through year-to-date (YTD), capturing strong revenue growth amid elevated demand. 2. M&A activity has outpaced the prior year with strategic buyers actively expanding and sellers capitalizing on favorable valuations. 3. Average M&A purchase multiples have increased year-over-year (YOY) reflecting the intense level of competition in deal processes for high quality companies. 4. Pricing and volume across aggregates materials have improved, with several materials experiencing drastic production increases from the prior quarter.Capstone Partners has developed a full suite of corporate finance solutions, including M&A advisory, debtadvisory, financial advisory, and equity capital financing to help privately owned businesses and private equityfirms through each stage of the company’s lifecycle, ranging from growth to an ultimate exit transaction.To learn more about Capstone’s wide breadth of advisory services and Rock Products industry expertise,please contact Managing Director Darin Good. 4
Rock Products | October 2021INTRODUCTIONIn this quarterly report, also published by Rock Products, Capstone Partners provides insight into mergers &acquisitions, capital markets trends, aggregates production, and pricing data through YTD 2021.Capstone’s Building Products & Construction Services Team advises industry business owners, entrepreneurs,executives, and investors in the areas of M&A, capital raising, and various special situations. Due to ourextensive background and laser focus within the industry, Capstone is uniquely qualified and has anunparalleled track record of successfully representing Building Products & Construction Services companies.PUBLIC COMPANY COMMENTARYEBITDA trading multiples in the Aggregates industry have improved YOY, resulting in an average of 9.9x, ahealthy increase from 8.6x in the prior year. Price % 52 Wk Market Enterprise LTM EV / LTMCompany 09/28/21 High Cap Value Revenue EBITDA Margin Revenue EBITDAHolcim Ltd $49.27 78.2% $30,140.9 $46,609.5 $27,045.9 $6,936.4 25.6% 1.7x 6.7xCRH plc $48.03 89.5% $37,290.7 $44,063.9 $29,416.0 $4,501.0 15.3% 1.5x 9.8xVulcan Materials Company $178.23 91.8% $23,647.2 $26,063.0 $4,914.4 $1,417.0 28.8% NM 18.4xHeidelbergCement AG $77.32 81.7% $15,503.4 $25,785.7 $21,757.4 $4,724.7 21.7% 1.2x 5.5xMartin Marietta Materials, Inc. $356.22 90.9% $22,220.1 $25,475.4 $4,568.8 $1,516.9 33.2% NM 16.8xCEMEX, S.A.B. de C.V. $0.76 84.9% $11,105.0 $19,612.5 $14,257.8 $3,561.7 25.0% 1.4x 5.5xMDU Resources Group, Inc. $30.15 86.1% $6,103.3 $8,545.2 $5,624.0 $1,060.8 18.9% 1.5x 8.1xEagle Materials Inc. $139.85 87.3% $5,857.2 $6,598.6 $1,671.4 $566.8 33.9% 3.9x 11.6xSummit Materials, Inc. $32.69 88.1% $3,858.1 $5,366.4 $2,430.0 $521.4 21.5% 2.2x 10.3xBuzzi Unicem S.p.A. $23.07 81.3% $4,431.9 $4,812.4 $3,928.0 $1,052.3 26.8% 1.2x 4.6xArcosa, Inc. $50.64 74.0% $2,451.0 $3,032.5 $1,904.4 $266.4 14.0% 1.6x 11.4x Mean 24.1% 1.8x 9.9xEV = enterprise value; LTM = last twelve months Median 25.0% 1.5x 9.8x$ in millions, except per share dataNM = Not Meaningful Harmonic Mean 22.3% 1.6x 8.2x Source: Capital IQ as of September 28, 2021 Darin Good Managing Director “The combination of favorable market trends, elevated valuations, and the race to capitalize on the low-tax environment will likely result in record M&A activity across the Aggregates industry.” 5
Rock Products | October 2021AGGREGATE MATERIALS INDEX KEEPS PACE WITH BROADER MARKET One-Year Index Return Comparison Up 32.1% AMI Index S&P 500 Dow Jones Industrial Average Aggregate Materials Index 60% 50% Up 32.6% 40% Index Return 30% S&P 500 20% Up 10% 26.4% 0% Dow Jones Industrial Average -10% Sep-20 Jan-21 May-21 Sep-21 Source: Capital IQCapstone’s Aggregate Materials Index (AMI) value has nearly mirrored the past one-year performance of theS&P 500, at +32.1%. Accommodative monetary policy, healthy downstream Construction markets, and theprospect of a sizeable federal infrastructure bill have provided a significant tailwind to publicly tradedaggregates materials players.STRONG CONSTRUCTION SPENDING TO DRIVE AGGREGATES DEMANDRobust activity in the Aggregates industry has been fueled by strengthening state and local budgets,healthy residential and nonresidential construction demand, and the prospect of a sizeable federalinfrastructure bill. While heavily impacted at the onset of the pandemic, state funding and budget levelshave begun to show signs of improvement as state and local construction spending increased modestlyin July from the prior month growing 0.8%, after falling through much of 2021, according to the U.SCensus Bureau.1 Continued strength in the Residential Construction market has driven substantialrevenue growth for leading industry players supplying home building products. While housing starts havecooled slightly in recent months, total starts in August outpaced prior year levels by 17.4% (U.S. CensusBureau2), buoyed by low mortgage rates and accelerated deurbanization trends. Notably, Martin Marietta(NYSE:MLM) experienced record second quarter revenue of $1.3 billion with aggregates shipments to theResidential market accounting for 25% of Q2 shipments, according to its earnings call.3 In addition,accelerated e-commerce adoption has driven increases in industrial warehouse and data centerconstruction, which are typically aggregates intensive projects, with warehouse construction spendingrising approximately 13.8% YOY in July.The Senate-passed bipartisan infrastructure bill represents the first sizeable federal transportationfunding in over 15 years, with a proposed $550 billion in new transportation and broader infrastructurespending over five years. The funding would significantly accelerate starts across public infrastructuresegments, providing a substantial revenue opportunity to aggregates providers. Despite favorablegrowth outlooks, rising diesel costs have pressured margins and labor shortages continue to adverselyaffect project staffing. Fortunately, the strong aggregates pricing environment has largely offset negativecost headwinds with pricing power expected to continue in the near term. In addition, industry playersare expected to continue to utilize M&A to address headcount issues and bolster capacity to undertakelarge construction projects. 6
Rock Products | October 2021M&A VALUATIONS ELEVATED THROUGH YEAR-TO-DATEM&A activity in the Aggregates industry has Aggregates Industry M&A Transaction Volumesurged through YTD 2021 with transaction volumerising by 33% YOY. The prospect of capital gainstax increases has driven many owners to expedite 300their exit timeline to maximize take homeproceeds. However, underlying market 250 Number of Transactionsfundamentals have also fueled a historic M&A 194environment as low-cost access to capital, 200 179elevated EBITDA purchase multiples, and strong 150 150 119cash flows among leading public companies haveencouraged a wave of transaction activity. 100 76 68Strategic buyers have comprised the majority of 51acquisitions (87%), attracted to target companies 50with strong geographic exposure, healthy endmarkets, and ability to drive synergies and margin 0improvement. Private equity buyers have 2016 2017 2018 2019 2020 YTD YTDdemonstrated steady interest in the sector, 2020 2021comprising 13% of total transactions, pursuing Year-to-date (YTD) ended September 23target companies with strong management teams, Source: Capital IQ, FactSet, PitchBook, and Capstone Researchrecurring revenue, and healthy gross margins.The M&A pricing environment has continued to favor sellers through YTD 2021, with the average EBITDApurchase multiple amounting to 11.4x, significantly improving from an average of 9.0x in 2020. Several recenttransactions have pointed to a sustained high-valuation M&A market—most notably with Vulcan Material’s(NYSE:VMC) watershed acquisition of U.S. Concrete for $2.1 billion. Its purchase multiple of 11.3x EBITDArepresented a healthy premium to U.S. Concrete’s public trading multiple of 9.5x prior to the announcementof the transaction. As high barriers to entry persist in the Aggregates industry, upcoming and establishedindustry players are expected to continue to seek attractive consolidation opportunities. Arcosa (NYSE:ACA)has demonstrated a willingness to pay premium multiples for scaled aggregates platforms as it seeks tobolster its competitive positioning in the industry, acquiring Southwest Rock Products (see next page) andStonePoint Materials (March, 13.4x EBITDA).PRIVATE EQUITY ACTIVITYGF Data Resources, a provider of detailed information on business transactions ranging in size from $10 to$250 million, provides quarterly data from over 200 private equity firm contributors on the number ofcompleted transactions. The following chart provides the number of completed transactions from GF Datacontributors, the average total enterprise value (TEV)/EBITDA multiples, and the average amount of debtutilized in the transaction computed as a multiple of EBITDA. The data, although not industry specific,displayed an increase in the average EBITDA multiple to 7.2x in Q2, in line with pre-pandemic averages. Private Equity Valuations & Leverage Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Transactions 81 63 72 95 36 59 131 95 81 TEV/EBITDA 7.2x 7.3x 7.1x 7.3x 7.3x 6.6x 6.9x 6.9x 7.2x Total Debt/EBITDA 4.0x 3.9x 3.9x 3.9x 3.3x 3.7x 3.7x 3.9x 3.7x Senior Debt/EBITDA 3.2x 2.9x 3.2x 3.5x 2.7x 2.7x 3.1x 3.6x 2.9x Source: GF Data® 7
Rock Products | October 2021PUBLIC COMPANIES LOOK TO BOLSTER MARKET SHARE AND MARGINSMartin Marietta continues to engage in M&A, allocating significant capital to enhance its product portfolio. Inaddition, Arcosa has emerged as an active buyer in the sector, pursing accretive target companies andestablishing itself as a top growing competitor in the space. Transaction Overview Leading aggregates and heavy building materials supplier Martin Marietta has acquired Southern Crushed Concrete (SCC) for an enterprise vale of approximately $140 million (August). Texas-based SCC offers construction materials including bull rock, cement stabilized sand, concrete sand, and crushed concrete. It employs efficient methods to produce recycled concrete for construction projects throughout Southeast Texas, reducing construction and transportation costs. SCC’s usage of construction waste at its recycling centers saves approximately 1.5 million cubic yards of landfill space Acquires annually, according to its website.4 M&A and Industry Takeaways The transaction adds to an active year of acquisitions for Martin Marietta and follows its recent purchases of Lehigh Hanson’s West Region Business for an enterprise value of $2.3 billion (May) and Tiller Corporation (May, undisclosed). It also underscores the emphasis leading public companies are placing on cost-effective methods of production to bolster margins and profitability amid a fluctuating pricing environment. Top industry players are poised to continue to explore accretive acquisitions to defend market share and improve their ability to undertake and staff large construction projects. Transaction Overview Arcosa has acquired premier natural aggregates provider Southwest Rock Products and affiliated entities for an enterprise value of $150 million, equivalent to 4.2x revenue and 10.7x EBITDA (August). Southwest Rock serves the greater Phoenix Metropolitan market with five active sand and gravel locations and one hard rock quarry. It produces approximately 5 million annual tons of construction aggregates, according to a press release.5 Acquires M&A and Industry Takeaways The acquisition of Southwest Rock aligns with Arcosa’s initiative to reduce cyclicality, enhance margins, and expand into new geographies. Since becoming an independent public company three years ago, Arcosa has pursued an aggressive inorganic growth strategy, investing approximately $1.3 billion in strategic construction material acquisitions, according to its earnings call.6 In addition, the Southwest Rock EBITDA purchase multiple of 10.7x, represents a premium compared to the average multiple Arcosa has paid for its four disclosed acquisitions from 2019 through 2021, which has amounted to 10.2x. Brian Krehbiel Director “The industry remains highly fragmented from a regional and local market perspective with many existing M&A opportunities remaining to continue the consolidation trend.” 8
Rock Products | October 2021SELECT TRANSACTIONS Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA Hi-Tech Concrete Concrete Pumping09/08/21 Provides concrete pumping services. $12.3 - - Pumping (Nasdaq:BBCP) Febcon Concrete Concrete & Materials08/30/21 Offers concrete pumping solutions. - - - Pumping Placement08/24/21 WKP Enterprises Earth Property Distributes sand, gravel, and soil. - - - Green Brothers SiteOne Provides building materials including sand, gravel,08/24/21 boulder, stack stones, and mulch. - - - Earth Works (NYSE:SITE) Southern Crushed Martin Marietta Manufactures recycled concrete and asphalt for08/17/21 construction projects in the Houston area. $140.0 - - Concrete (NYSE:MLM) Atlantic Mulch Heritage Landscape Supplies landscape products including pavers, natural08/16/21 - - - and Erosion Supply Group stones, gravel, and aggregates. Valley View Manufactures aggregates, agricultural limestone, and08/13/21 Prairie Material Sales crushed stone products. - - - Industries Three ready-mix Comprises three ready-mix concrete08/10/21 Chaney manufacturing plants. - - - concrete plants Southwest Rock08/04/21 Arcosa (NYSE:ACA) Provides crushed stone and gravel. $150.0 4.2x 10.7x Products Daurity Springs Construction Partners08/02/21 Comprises a crushed stone and aggregates facility. - - - Quarry (Nasdaq:ROAD) Brickworks Distributes brick, stones, concrete masonry,08/02/21 Assets of Southfield materials & tools. $51.1 - - (ASX:BKW) Eastern Gypsum of Comprises the eastern U.S. gypsum operations of07/07/21 L&W Supply Builders FirstSource. - - - Builders FirstSource Barbour Concrete Forterra07/01/21 Manufactures precast concrete products. - - - & Building Systems (Nasdaq:FRTA) Stewart Concrete/ Stewart Concrete and Stewart-Morrison Redi-Mix06/30/21 BMC - - - Stewart-Morrison manufactures concrete products. Manufactures unit concrete products for06/22/21 EP Henry Oldcastle consumer and commercial hardscaping. - - - Vulcan Materials Produces and sells ready-mixed concretes,06/07/21 U.S. Concrete aggregates, and concrete-related products. $2,128.9 1.6x 11.3x (NYSE:VMC) Lehigh West Region Martin Marietta05/24/21 Manufactures construction materials. $2,300.0 - - Business (NYSE:MLM) Beehive Brick & Heritage Landscape Provides brick and stone for commercial and05/21/21 - - - Stone Supply residential construction. Outdoor Living05/10/21 George Schofield Offers natural stone products in the northeast. - - - Supply Manufactures and distributes materials for the05/06/21 Highway Materials American Highway Concrete industry. - - - Martin Marietta05/04/21 Tiller Provides aggregates and asphalt products. - - - (NYSE:MLM) Béton Mobile du Develops and delivers concrete to the Residential,05/03/21 Lafarge Canada Commercial, and Industrial sectors. - - - Québec New Enterprise Manufactures and sells stone, sand, asphalt,04/30/21 Hempt Bros and concrete. - - - Stone & Lime Source: Capital IQ, PitchBook, FactSet, and Capstone Research 9
Rock Products | October 2021COMPANY SPOTLIGHTS Ticker: NYSE:MDU Headquarters: Bismarck, ND Markets: Construction Materials LTM Revenue: $5.6 Billion Market Capitalization: $6.0 BillionCompany Description Share Price PerformanceMDU Resources (NYSE:MDU) experienced record $50second quarter earnings of $28.9 million in itsConstruction Services group, driven by robust $45demand for inside and outside specialty $40contracting, according to its earnings call.7 In $35addition, backlog levels in the segment havereached an all time high, standing at $1.32 billion at $30 U.S. Dollarsthe end of June. MDU’s Construction Materials $25business reported a slight decline in earnings, $20falling to $51.4 million from $53.0 million, largelyattributed to higher labor-related costs. However, $15materials continue to experience strong demand $10and healthy pricing as backlog in the ConstructionMaterials business has improved to $912 million as $5of June 30, surpassing the prior year levels of $0$875 million. Sep-20 Dec-20 Mar-21 Jun-21 Sep-21“Demand for construction services remains high forboth the inside and outside specialty contracting.Inside specialty contracting saw a strong demand Revenue Share by Segmentfor commercial industrial work, specifically in themanufacturing industry. And outside contracting 1.5%workloads increased with high demand from theutility industry, ” commented Jason L. Vollmer, MDU 6.0%Resources Group Vice President & Chief FinancialOfficer, in the earnings call. 15.3% 39.4%MDU Resources continues to explore acquisitionopportunities to expand its existing footprint andbolster its market share. Notably, its subsidiaryKnife River acquired Mt. Hood Rock Products (April, 37.8%undisclosed), enhancing its aggregates presence inthe Portland metropolitan area. MDU’s futureguidance points to an expected earnings per sharein the range of $2.00 to $2.15 in 2021, with EBITDA Construction Materials Construction Servicesbetween $875 million and $925 million, according Natural Gas Distribution Electricto its earnings release.8 Pipeline Source: FactSet and Capital IQ 10
Rock Products | October 2021COMPANY SPOTLIGHTS (CONTINUED) Ticker: NYSE:EXP Headquarters: Dallas, TX Markets: Construction Materials LTM Revenue: $1.7 Billion Market Capitalization: $5.9 BillionCompany Description Share Price PerformanceEagle Materials (NYSE:EXP) achieved record $180revenue of $476 million in fiscal Q1 2022 ending onJune 30, marking an 11% increase from the prior $160year, according to its earnings release.9 Strong $140revenue has been fueled by healthy demand inResidential Construction markets and heightened $120levels of infrastructure spending. Eagle’s Heavy U.S. Dollars $100Materials segment, inclusive of cement, concrete,and aggregates, reported a 3% revenue increase $80driven by increases in cement sales price. Revenue $60in Eagle’s Light Materials segment surged 25% YOY,as higher wallboard sales volume and prices $40contributed to robust operating performance. $20“Residential construction represents the most $0important single demand driver for us, driving Sep-20 Dec-20 Mar-21 Jun-21 Sep-21around 80% of the demand for gypsum wallboardand about 30% of the demand for cement. Theoutlook for housing starts, especially single-familystarts, which are particularly important for Revenue Share by Segmentwallboard demand remains strong. As long asmortgage interest rates stay in the lower quartile 5.6%by historic standards, this should be largelysustainable as we have been underbuilding againstunderlying demand in the U.S. for over a decade,” 9.8%commented Michael R. Haack, Eagle MaterialsPresident, Chief Executive Officer & Director, in anearnings call.10 53.5% 31.2%Repair and remodeling projects have alsorepresented a strong revenue opportunity forEagle, as stimulus measures and home priceappreciation have encouraged homeowners toincreasingly undertake renovation projects. Inaddition, the Senate-passed $1 trillion Cement Gypsum Wallboardinfrastructure bill would provide a significant boost Concrete & Aggregates Paperboardto Eagle’s cement business which is largely drivenby infrastructure projects. Source: FactSet and Capital IQ 11
Rock Products | October 2021 CONSTRUCTION MATERIALS UPDATE Construction input prices fell 0.6% in August from the prior month, however prices remain 20.8% higher YOY, according to the Bureau of Labor Statistics.11 Natural gas has led YOY pricing increases, rising 132.2% followed by steel mill products which have grown 123.1%. Producer Price Index Percent Change Inputs to Construction Industries (August 2017 - August 2021) One Month % Change 12 Month % Change 25% 20%Percent Change 15% 10% 5% 0% -5% -10% Dec-20 Feb-20 Aug-19 Apr-18 Aug-18 Aug-17 Apr-19 Aug-20 Apr-20 Feb-21 Aug-21 Oct-19 Oct-18 Apr-21 Oct-17 Oct-20 Jun-18 Jun-19 Jun-20 Dec-18 Dec-17 Feb-19 Dec-19 Feb-18 Jun-21 Source: U.S. Bureau of Labor Statistics 12
Rock Products | October 2021AGGREGATE MATERIALS UPDATEAggregates materials production has registered substantial increases compared to the prior year, which bodeswell for downstream construction demand. Pricing also continues to show strength across all aggregatematerials categories.Cement U.S. Cement Production Cement Volume• Portland cement consumption amounted to 29 Cement Price 200 $130 million metric tons in Q2, marking a 7.8% increase YOY. Cement consumption has $120 Millions of Tons 150 Price Per Ton surged compared to Q1, rising 35.5%. $110• The average net selling price per ton for Martin 100 Marietta and Eagle Materials cement in Q2 $100 increased 6.7% YOY to $119.23. 50 $90 0 $80 Source: U.S. Geological Survey and Capstone ResearchReady-Mix Concrete U.S. Ready-Mix Concrete Production Ready-Mix Concrete Volume Ready-Mix Concrete Price• Ready-mix concrete (RMC) prices increased 2.6% YOY in Q2 to $121.02 per cubic yard. Price 600 $150 Millions of Cubic Yards data is computed from the average RMC net Price Per Cubic Yard selling prices of Vulcan Materials, Martin 450 $125 Marietta, and Eagle Materials. 300 $100• RMC volume increased 7.7% YOY in Q2 to 106.3 million cubic yards. Notably, production volume 150 $75 grew substantially compared to the prior quarter, rising 35.2%. 0 $50 Source: NRMCA Industry Data Survey, Average RMC selling price of U.S. Concrete (not included in Q2 2020 and Q2 2021 due to acquisition by Vulcan), Vulcan Materials, Martin Marietta Materials, Eagle Materials, and Capstone Research 13
Rock Products | October 2021AGGREGATE MATERIALS UPDATE (CONTINUED)Asphalt U.S. Asphalt Production Asphalt Volume• Asphalt prices increased 2.9% per ton YOY in Asphalt Price Q2, as measured by the average net asphalt 500 $60 selling prices of Vulcan Materials and Martin Marietta. Pricing in Q2 also increased by 1.1% Millions of Tons 400 $50 Price Per Ton compared to Q1. 300 $40• Asphalt volume is reported on an annual basis. The most recent asphalt production amounted 200 $30 to nearly 422 million tons in 2019. 100 $20 Source: NAPA Asphalt Pavement Industry Survey, Vulcan Materials, Martin Marietta Materials average of net asphalt selling prices, and Capstone ResearchCrushed Stone U.S. Crushed Stone Production Crushed Stone Volume• Crushed stone production increased 3.8% YOY Crushed Stone Price in Q2 to 415 million metric tons. Compared to 2,000 $13.0 Q1, production grew a robust 42.6%. Millions of Tons 1,500 $12.0 Price Per Ton• Crushed stone prices are recorded on an annual basis. 1,000 $11.0 500 $10.0 0 $9.0 Source: U.S. Geological Survey and Capstone ResearchSand & Gravel U.S. Sand & Gravel Production Sand & Gravel Volume• An estimated 279 million metric tons of sand & Sand & Gravel Price gravel were produced and shipped for 1,600 $11.0 consumption in Q2, an increase of 10.7% YOY. 1,200 $10.0 Millions of Tons Sand & gravel has exhibited the largest Price Per Ton production increases compared to the prior quarter, with volume rising 55.0%. 800 $9.0• Sand & gravel prices are recorded on an 400 $8.0 annual basis. 0 $7.0 Source: U.S. Geological Survey and Capstone Research 14
Rock Products | October 2021FIRM TRACK RECORDCapstone Partners’ Building Products & Construction Team has represented clients across variousconstruction specialties. Our deep industry focus allows us to provide our clients with real-time transactionfeedback and immediate access to key decision makers among the most active acquirers and investors inthe Construction industry. A sampling of closed transactions is shown below. HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY a portfolio company of MANAGEMENT BUYOUT HAS RECAPITALIZED HAS PARTNERED WITH SUPPORTED BY WITH a portfolio company of HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY HAS RECAPITALIZED WITH a portfolio company of HAS BEEN RECAPITALIZED BY HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY a portfolio company of 15
Rock Products | October 2021ROCK PRODUCTS REPORT CONTRIBUTORS Darin Good Managing Director dgood@capstonepartners.com | 303-549-5674 Darin is an advocate for his clients, guiding them through the complex process of raising debt, equity or selling their company. During the past 24 years, Darin has led business owners and their board of directors through this process over 70 times. Courts, trade groups and national publications recognize Darin’s expertise where he provides testimony as an expert witness and speaks about topics involving mergers and acquisitions. Prior to joining Capstone, Darin started, operated, made acquisitions and sold three successful companies in construction, import and distribution, and commercial real estate management. Three sell side transactions that Darin performed are published and taught in business schools around the globe. Darin teaches these cases at the University of Denver, where he received his Bachelor of Science in Finance. Crista Gilmore Director cgilmore@capstonepartners.com | 303-531-5013 Crista started her career at KPMG LLP then accepted a Senior Associate role with a $12 billion multi-strategy hedge fund managing the monthly PnL close process for several funds. She was promoted to Vice President, Valuations responsible for pricing the portfolio of over 8,000 securities monthly, as well as reporting to the Valuation Committee on a bi-monthly basis. At Capstone, Crista works with clients to improve their financial metrics and reporting capabilities. Additionally, she performs research, valuation analysis, prepares marketing documentation, manages client data rooms and responds to due diligence inquiries. Crista graduated summa cum laude from Drake University with a degree in Finance and Accounting. She also earned a Master’s of Accounting degree from Drake University and is a CFA Charterholder. Brian Krehbiel Director bkrehbiel@capstonepartners.com | 970-215-9572 Prior to joining Capstone Partners in 2011, Brian spent five years with a boutique investment bank performing sell-side transactions, financial modeling and value-add client services. At Capstone, Brian is a member of the Building Products & Construction Services team assisting clients with sell-side, buy-side and debt and equity raise transactions. Prior to his career in Investment Banking, Brian developed construction industry and operations experience owning and managing a successful family-owned residential construction company. His education and industry expertise are resources used in all aspects of the transaction process. Brian graduated from the University of Northern Colorado with a BS degree in Finance and he is a CFA Charterholder. Connor McLeod Research Manager cmcleod@capstonepartners.com | 617-619-3319 Connor currently serves as Research Manager at Capstone Partners. Connor provides M&A insights, capital markets analysis, and macroeconomic trends for C-suite middle market executives. He specializes in the coverage of the Building Products, Healthcare, and Consumer industries. Prior to joining the Research Team at Capstone, Connor was a specialist with the Investor Services team at BlackRock where he was responsible for assessing fund and account performance, communicating relevant market dynamics, and facilitating trades for shareholders, financial advisors, and institutional clients. 16
Rock Products | October 2021ENDNOTES1. U.S. Census Bureau, “Construction Spending,” https://www.census.gov/construction/c30/c30index.html, accessed September 29, 2021.2. U.S. Census Bureau, “MONTHLY NEW RESIDENTIAL CONSTRUCTION, AUGUST 2021,” https://www.census.gov/construction/nrc/pdf/newresconst.pdf, accessed September 28, 2021.33. Martin Marietta, “Events & Presentations,” https://ir.martinmarietta.com/events-presentations, accessed September 28, 2021.4. SCC Materials, “About,” https://www.scctx.com/about/, accessed September 28, 2021.5. Rock Products, “Arcosa Acquires Southwest Rock Products,” https://rockproducts.com/2021/08/05/arcosa- acquires-southwest-rock-products/, accessed September 27, 2021.6. Seeking Alpha, “Arcosa, Inc. (ACA) CEO Antonio Carrillo on Q2 2021 Results - Earnings Call Transcript,” https://seekingalpha.com/article/4445480-arcosa-inc-aca-ceo-antonio-carrillo-on-q2-2021-results-earnings- call-transcript, accessed September 28, 2021.7. MDU Resources, “Events & Presentations,” https://www.mdu.com/investors/event-presentations/default.aspx, accessed September 28, 2021.8. MDU Resources, “Second Quarter Earnings Call,” https://s21.q4cdn.com/410701468/files/doc_presentations/2021/08/Second-Quarter-2021-Slide-Deck.pdf, accessed September 28, 2021.9. Eagle Materials, “Eagle Materials Reports First Quarter Results,” http://ir.eaglematerials.com/news-releases/news- release-details/eagle-materials-reports-first-quarter-results-1, accessed September 28, 2021.10. Seeking Alpha, “Eagle Materials Inc. (EXP) CEO Michael Haack on Q1 2021 Results - Earnings Call Transcript,” https://seekingalpha.com/article/4442051-eagle-materials-inc-exp-ceo-michael-haack-on-q1-2021-results- earnings-call-transcript, accessed September 28, 2021.11. Bureau of Labor Statistics, “PPI Commodity Data,” https://data.bls.gov/timeseries/WPUIP2300001, accessed September 28, 2021. Common Goals. Uncommon Results. Disclosure This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisition activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the general information of clients and friends of Capstone Partners. It does not take into account the particular investment objectives, financial situation or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Partners. The decisions to include any company in this report is unrelated in all respects to any service that Capstone Partners may provide to such company. This report may not be copied or reproduced in any form or redistributed without the prior written consent of Capstone Partners. The information contained herein should not be construed as legal advice. 17
Market PresenceWith a long-established U.S. footprint, together with an international partnerplatform, we provide clients with broad expertise and access to key marketrelationships on a global basis. Our presence is backed by ~200 professionals in theU.S. with 450+ professionals across 43 countries. 218 $12.5B 30% 6th M&A transactions aggregate of our deals globally ranked for completed in 2020 transaction value are cross- deals under $500m border $65.1M 51 65% average deals involving foreign completed with a transaction private equity firms European partner value United States International 170+ professionals 450+ professionals 12 offices 60+ offices in 43 countries Boston · Chicago · Dallas · Asia: China · India · Japan · Thailand Denver Detroit · Los Angeles · Africa: Congo · Egypt · Ghana · Ivory Coast · Mauritius · Morocco · Nigeria · Senegal · South Africa New York Orange County · Americas: Toronto · Vancouver · Argentina · Brazil · Chile · Colombia · Mexico · Panama & Central Philadelphia Richmond · San America · Peru Diego · Tampa Europe: Belgium · Bosnia & Herzegovina · Croatia · Czech Republic · Finland · France · Germany · Hungary · Ireland Italy · Netherlands · Poland · Portugal · Russia · Serbia · Slovakia · Slovenia · Spain · Sweden · United Kingdom capstonepartners.com
