Elementia Successfully Completes Acquisition of Giant Cement Holding, Inc. to Enter the U.S. Cement Market

MEXICO CITY--()--Elementia, S.A.B. de C.V. (BMV:ELEMENT*) (the “Company”, or “Elementia”) today announced that the Board of Directors gave final approval to complete the acquisition of a 55% stake and full control of Giant Cement Holding, Inc. (“Giant”) from Cementos Portland Valderrivas, S.A. (“CPV”) for US$220 million.

The transaction can be summarized as follows:

1. Elementia paid US$220 million for a 55% stake and full control of Giant using the proceeds obtained from the capital increase through a Rights Offering, resulting in an implied equity value of US$400 million.

2. Elementia granted a loan to Giant for US$305 million through its committed credit lines.

3. Giant utilized both resources (totaling US$525 million) to pre-pay 100% of its current debt, as previously agreed between the parties.

Is important to highlight that given the volatility of the currency exchange, the Company hedged the resources from the capital increase and the loan granted to Giant at a rate of close to $19 Mexican pesos per dollar.

The debt replacement will reduce Giant’s financial cost by more than 75%, which will free up sufficient cash flow to execute the investments required to capture the many opportunities Elementia foresees and thus, generate the expected additional value.

With this transaction, Elementia adds over 2.8 million tons of cement production capacity per year through three cement plants, three limestone quarries, two aggregate quarries and six cement terminals, along with a solid customer base and reputable brands such as Keystone, Dragon, Giant, and Grr!

Fernando Ruiz Jacques, Chief Executive Officer of Elementia, commented, “Today marks a major milestone for Elementia as we successfully enter the U.S. cement market and take another solid step within our inorganic growth strategy. The work of our transition team is already underway to extract the tremendous value we see in Giant.”

ABOUT ELEMENTIA

Elementia is the leading building materials company with a strong presence in the American Continent. Its organic growth and the result of its mergers and acquisitions has enabled it to be an integral platform with more than 4,000 products, backed by 14 local and regional brands including: Fortaleza ® / Nacobre ® / Mexalit ® / Eureka ® / Allura ® / Plycem ® / Eternit ® / Duralit ® / Fibraforte ® / Frigocel ®. Elementia’s products and solutions meet the needs of the different construction methods that exist in the market it operates in, and it is able to supply up to 75% of the materials used to build a typical house. The Company has over 6,000 employees, operating presence in 9 countries and a broad distribution network for its three business divisions: Cement, Metal Products and BuildingSystems. Elementia is the No. 1 producer of fiber cement in Latin America and No. 2 in the United States. It is also one of the largest and most diversified copper manufacturers and copper alloys worldwide, and the most recent player into the Mexican cement market in 70 years. For more information go to www.elementia.com.

Contacts

For Elementia
Investor Relations
Juan Francisco Sanchez Kramer, +5255 4124 1133
jsanchezk@elementia.com
www.elementia.com

Contacts

For Elementia
Investor Relations
Juan Francisco Sanchez Kramer, +5255 4124 1133
jsanchezk@elementia.com
www.elementia.com