CSR America Acquires Florida Concrete Pipe Business.

Business Editors

WEST PALM BEACH, Fla.--(BUSINESS WIRE)--Aug. 28, 2000

CSR America, Inc. (CSRA) has further strengthened its position as the leading concrete pipe and products manufacturer in the US, with the acquisition of a large concrete pipe business in Tampa, Florida.

CSRA has purchased certain assets of Southern Culvert, LC for US$35 million, including a large concrete pipe plant in Tampa and a second plant in Jacksonville, Florida. Also included in the acquisition is a corrugated metal pipe fabrication business in Tampa and Fort Pierce, Florida.

The Southern Culvert acquisition is part of the ongoing strategy of expanding through value-creating, bolt-on acquisitions across the country. CSRA operates in 30 states of the USA.

CSRA CEO David Clarke said the acquisition provides CSRA with a presence in the two major growth markets of Tampa and Jacksonville where it currently has no presence in concrete pipe.

It will confirm CSRA as the leading supplier of concrete pipe in Florida - complementing CSRA's existing operations and providing various administrative and other synergy benefits. CSRA will also gain upstream synergies through the supply of cement and aggregates to Southern Culvert.

"The acquisition will also provide further opportunities for CSRA to benefit from the TEA-21 highway and road infrastructure spending program in Florida, through the supply of drainage pipe and drainage structures," said Clarke.

"TEA-21 activity during the next four years is expected to be very strong in Florida following an initial lag as the industry has been gearing up for the new higher level of spending. In addition, road funding in Florida has been further enhanced recently by Governor Bush's US$6 Billion 10 year Mobility 2000 initiative."

The acquisition will also provide entry into the corrugated metal pipe (CMP) product market. Drainage contractors use a variety of products, including concrete pipe, CMP and plastic pipe. CMP competes well against plastic pipe in Florida and is extensively used in irrigation, agricultural and flood control applications where products other than concrete pipe are more suited or specified. CMP's cost and weight advantages, compared to concrete pipe, enable it to be shipped over greater distances, and Southern Culvert's production facilities provide coverage to the entire state.

The acquisition multiple is similar to previous concrete pipe and products purchases by CSRA and the business is expected to deliver an earnings rate above its cost of capital in the first year of operation.