Dallas-Based Arcosa Makes $87M Acquisition That Could Reduce Transportation Costs, Carbon Footprint

In January, Arcosa Inc acquired Cherry, a Houston-based producer of natural and recycled aggregates, for $298 million. That move added natural aggregates, recycled aggregates, and specialty materials to Arcosa’s Construction Materials portfolio, which enabled the company for continued organic and acquisition growth.

Now, Arcosa is ready to continue that growth. The provider of infrastructure-related products and solutions announced that it is acquiring Strata Materials, a provider of recycled aggregates in Dallas-Fort Worth, for around $87 million.

And according to Arcosa, its newest acquisition is a replication of the model created in January with Cherry.

“By leveraging our Cherry team’s operational and commercial expertise in recycled aggregates, and our long-standing relationships with DFW customers, we expect to drive incremental growth,” Arcosa President and CEO Antonio Carrillo said in a statement. “Strata’s margins are similar to Cherry’s recycled aggregates margins, and should be accretive to our overall Construction Products Group margin.”

Strata will help Arcosa increase its exposure in a growing product category that’s driven by economic benefits and environmental, social and corporate governance. Strata has five recycled aggregates locations and one natural aggregates plant, per a statement, and has produced more than two million tons of aggregates throughout the last 12 months.

A recycled aggregate refers to construction debris that is reused in other building projects, such as in concrete or asphalt. With a company like Strata, hundreds of thousands of tons of concrete and asphalt rubble are saved from being disposed in landfills.

According to Strata, it gathers material from demolition sites, crushes it, and sizes it into recycled construction materials. The products can be used in all types of construction projects and provide credits for those that are LEED-certified.

The overall intent is to reduce waste and provide reductions to construction costs and environmental impact.

“Strata’s strategic network will allow us to serve customers with a complementary product offering that includes both recycled and natural aggregates,” Carrillo said. “We believe that this model will have increasing value as the construction industry seeks to reduce transportation costs and its carbon footprint by using both recycled and natural aggregates.”

Arcosa CEO Antonio Carrillo [Photo: Courtesy Arcosa]

In acquiring both Cherry and Strata, Acrosa will be able to reposition around core infrastructure products. It now operates 40 natural aggregates, recycled aggregates, and specialty materials plants in Texas.

“We’re excited to be able to offer our North Texas customers a complementary product offering that will now include recycled and natural aggregates,” Carrillo said in an email to Dallas Innovates. “The environmental benefits of recycled aggregates include reduced landfill usage, lower transportation costs, and a lower overall carbon footprint for the construction industry. We look forward to supporting our North Texas customers with this growing product line.”

Arcosa occupies around 40,000 square feet in downtown Dallas’ Ross Tower at its corporate headquarters. The company has businesses with leading positions in construction, energy, and transportation markets with annual revenues in excess of $1 billion.

In April, Carrillo added his signature, along with 330 fellow CEOs, to the National Association of Manufacturers’ letter urging Mexico President Andrés Manuel López Obrador to consider manufacturing and supply business lines as essential to the delivery of critical supplies and daily essentials to citizens across Mexico and North America.

Arcosa operates five manufacturing plants in Mexico and 90 manufacturing plants in the U.S., with Texas being home to its largest plant.

To manage its large manufacturing operations, the Arcosa Best Practices Team created a living document that is reviewed and updated daily with new findings from the CDC and research.

“We understand that outside of these safe places employees carry a greater risk of contracting the virus,” Carrillo said. “We have to be very careful of risk management and the risk tolerance of an employee in every facility.”