| As you have likely heard, Vulcan Materials has announced that it is acquiring Florida Rock, one of the nations leading producers of construction aggregates, cement, concrete and concrete products in the Southeast and Mid-Atlantic states. | |
| We wanted to let you know as quickly as possible about this news. | |
| Our acquisition of Florida Rock represents an important milestone for Vulcan, our employees, our shareholders and our customers. It will significantly enhance our strategic position, further broadening our geographic reach and positioning us for greater growth and success. | |
| Florida Rock is an ideal, natural business fit; we both have highly compatible cultures, similar management philosophies and a commitment to operational excellence. | |
| This transaction is about growth, and we believe there will be enhanced long-term opportunities for employees as part of a stronger, more geographically diversified organization. | |
| One of the most important things we can all do at this time of transition is stay focused on our jobs and continue to serve our customers well. | |
| It is also important to be aware that there are limits imposed by federal securities and antitrust laws on what information we may share and what actions we may take in the coming months while this transaction is being finalized. Please be mindful that you should not communicate any information that strays beyond the information provided and should direct all inquiries to senior management in your Division or to the transaction website at www.vulcanfloridarock.com. | |
| Thank you for your continued dedication and commitment your hard work in building Vulcan Materials has made this exciting growth opportunity possible. | |
| We will keep you apprised of any relevant news as it develops. In the meantime, I will do my best to answer any questions you may have. | |
| Vulcan Materials Chairman and CEO, Don James, will be hosting an employee conference call and webcast tomorrow, February 20, at 9:30 a.m. CST to talk more about this exciting combination. Please feel free to listen in via telephone or the web. The webcast can be accessed at http://vnet and a replay of the webcast will be available for the next four weeks. Alternatively, the dial-in number from within the U.S. is 866-770-7129 and from outside the U.S. is 617-213-8067; the passcode is 40262668. |
1. | Whats the strategic rationale for doing this transaction? | |
Florida Rock is a very profitable business in terrific markets with great reserves. It will significantly enhance our strategic position, further broadening our geographic reach and positioning us for greater growth and success. | ||
2. | What are the terms of the transaction? |
Vulcan Materials will acquire Florida Rock in a cash and stock transaction valued at approximately $4.6 billion. Of the total consideration, 70% of Florida Rock shares will be paid for in cash and 30% will be paid for in newly issued shares. | ||
3. | How will employees be impacted by this transaction? | |
This transaction is about growth, and we believe there will be enhanced long-term opportunities for employees as part of a more robust, combined organization. That said, there will be some geographic and overhead overlap in integrating the two companies, and some of the cost savings we expect are related to overhead functions. | ||
4. | Are you planning on closing or consolidating any offices or facilities? | |
In locations where both companies operate, we expect to consolidate the management of those operations, which should result in modest overhead reductions. | ||
5. | Do you expect an antitrust review? | |
We will work with the antitrust agencies to obtain Hart-Scott-Rodino clearance as expeditiously as practicable. While there can be no guarantee, we are confident that we will obtain HSR clearance mid-year 2007, if not sooner. | ||
6. | How will you integrate the organizations? | |
As you know, Vulcan Materials has a decentralized operating structure currently consisting of seven divisions. We will create an eighth division to combine Vulcan Materials and Florida Rock operations in Florida. Other Florida Rock operations will be absorbed into existing Vulcan Materials Divisions. | ||
7. | Do you anticipate any culture issues resulting from the integration? | |
The two companies have highly compatible corporate cultures and we anticipate a smooth integration process. | ||
8. | When do you expect the deal to close? | |
We expect the transaction to close in mid-year 2007, subject to Florida Rock shareholder approval, approval by regulatory and other authorities and customary closing conditions. Until then, Vulcan Materials and Florida Rock remain independent competitors, and should be treated as such. |