Vulcan International is a chemicals (40%) and structure materials (60%) company. Due to the high dimension of transportation costs relative to product value the construction materials industry is highly fragmented, consisting largely of local firms. At the metre of the occurrences narrated in this case, Vulcan was the largest construction materials company in the US, controlling near 20% of the market. As of 2007, it had sales of $3.0 billion with around 11,000 employees. accord to company information, Vulcan
Owns 334 aggregate production and related facilities serving 22 states, the District of Columbia, the Bahamas and Mexico.
Owns 183 st 1 quarries, 51 moxie and gravel plants, 84 sales yards, 47 mineral pitch plants, and 131 ready-mixed concrete facilities.
Produces crushed stone, sand and gravel, and other construction aggregates.
Is one of the top 5 producers of asphalt and a leading producer of ready-mixed concrete.
In 2004 Vulcan acquired at auction off for $91 million the Whites Uvalde Mines Company which owned major mining interests in the Uvalde County thrill Asphalt region an area of approximately 75,000 to 100,000 acres containing the only marketable rock asphalt in Texas.
Whites Uvalde Mines Company consisted of quatern rock quarries, four rock asphalt quarries, one trucking company and one specialty asphalt quarry.
The acquisition was recorded as follows:
Rock AsphaltOther sum
(In million dollars)
Working Capital $ 2 $ 5 $ 7
Property, plant &
Equipment 18 20 38
Land, Mineral reserves 26 5 31
Goodwill 5 10 15
Total$ 51$ 40 $ 91
To arrive at the above valuations Vulcan utilize the pass judgment discounted cash flows (12% discount rate) from the various components of the newly acquired operation. At the time of the acquisition Texas was experiencing a housing boom and it was expected that Texas economy would continue...If you want to get a full essay, enounce it on our website: Orderessay
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