GCC ACQUIRES MID-CONTINENT CONCRETE CO. IN US$271 MILLION TRANSACTION
Strategic Expansion to Increase GCC´s U.S. Sales by More than 50%
Chihuahua, Chih., Mexico / Tulsa, OK, April 26, 2006 - Grupo Cementos de Chihuahua
S.A. de C.V. ("GCC" or the "Company") (BMV: GCC*), a leading cement producer in the markets where
it competes in Mexico, the United States and Bolivia, today announced the acquisition of 100% of
the share capital of The Hardesty Company, Inc., doing business as Mid-Continent Concrete Company,
and Alliance Transportation, Inc. (collectively referred to as Mid-Continent or MidCo) in a
US$271.0 million transaction. The acquisition will be financed with debt and will close on May 1.
MidCo will be operated as a wholly-owned subsidiary of GCC by its current management team.
Based in Tulsa, Oklahoma, MidCo is the largest producer of ready-mix concrete
in northeastern Oklahoma and northwestern Arkansas, and among the top 25 ready-mix producers in the
United States.
"The acquisition of Mid-Continent significantly expands GCC´s footprint in
the U.S." said Manuel Milan, Chief Executive Officer of GCC. "This transaction reflects GCC´s
ongoing strategy of investing in growth, and will allow us to leverage the strong continued demand
forecasted in the construction market".
Key Benefits of Acquisition
Expansion of GCC´s U.S. footprint with the acquisition of a market leader in
a new region that compliments GCC´s existing business.
Participation in a market with strong expected growth and favorable outlook
for concrete pricing, based on committed infrastructure and commercial construction projects, as
well as regional economic development programs and allocations from the Federal Highway Bill
program.
Competitive network of ready-mix plants.
Immediately accretive to earnings. MidCo´s estimated sales in 2006 are US$138
million.
About Mid-Continent Concrete Company
MidCo owns and operates 30 ready-mix plants and a fleet of 250 mixer trucks.
In addition, the transaction includes the acquisition of Alliance Transportation, which operates 87
haul trucks to support raw materials handling for MidCo, as well for other third-party customers.
In 2005, MidCo generated US$117.1 million in total revenue on the sale of 1.6 million cubic yards
of concrete.
The company´s operations span from the metropolitan Tulsa area into
northeastern Oklahoma and northwestern Arkansas, and have a market leadership position. The
distribution of the company´s plants enables it to efficiently service its base of over 2,500
customers with low overall delivery transportation costs.
MidCo´s management team has significant experience in the ready-mix concrete
industry, and the average tenure of the company´s sales force is close to 10 years.
About GCC
GCC is a leading supplier of cement, aggregates, concrete and
construction-related services in Mexico and the United States, and holds an interest in Bolivia´s
largest cement company. The Company´s annual cement production capacity is 4.0 million tons. Sales
in 2005 totaled Ps. 4,700 millions pesos.
Founded in 1941, the Company´s shares trade on the Mexican Stock
Exchange under the ticker symbol GCC*.
