Publicly traded Commercial Metals Co. (CMC) bought Alpharetta, Ga.-based Tensar Corp. from private equity group Castle Harlan Inc. for $550 million to expand its construction offering with complementary ground reinforcement products.

Tensar produces plastic geogrids in rolled sheets for subgrade ground stabilization, soil reinforcement and to extend the life of asphalt. It also produces plastic Geopiers brand foundation systems for almost all soil types.

Tensar products, which are made mostly of polypropylene or high density polyethylene, are used alongside Irving Texas-based CMC's steel forms and rebar in many applications to reduce site excavation and aggregates volumes, which decreases material haulage and construction time.

The early-phase construction products extend CMC's growth runway for roads, infrastructure, energy and building projects in an addressable market of $13 billion, according to an investor presentation.

Founded in 1915, CMC posts annual sales of about $5.5 billion. The company manufactures steel and metal products. It has steel fabrication, processing plants, warehouses and metal recycling facilities in the United States and Poland.

CMC's purchase price for Tensar represents 8.4 times the forecast fiscal year 2021 earnings before interest, taxes, depreciation and amortization, including cost synergies, the presentation says.

"I am thrilled to welcome Tensar's 650 worldwide employees to Commercial Metals," Barbara Smith, CMC chairman, president, and CEO, said in a news release. "This acquisition marks another important milestone in CMC's growth strategy, expanding the scope of products and services we can provide to our customers."

The transaction is structured as an equity purchase with CMC acquiring all related assets, including intellectual property.

Tensar has a more extensive manufacturing footprint than its competitors with production plants in Morrow, Ga.; Shadsworth, England; Peterhof, Russia; and Wuhan, China, and engineering offices in Davidson, N.C., and Bonn, Germany.

Castle Harlan had acquired Tensar in July 2014 from the investment group Arcapita Inc.

"We enjoyed working with Castle Harlan over the seven years we were with them," Tensar CEO Mike Lawrence said in a news release. "Their advice and guidance proved to be useful to the growth of the company, and they supported us in establishing our industry-leading team of people. We look forward to a strong future in our markets with significant prospects and still many unmet opportunities."

Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

Please enter a valid email address.

Please enter your email address.

Please select at least one newsletter to subscribe.

Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

1155 Gratiot Avenue Detroit MI 48207-2997