Nov 25 (FocusOn) – Summit Materials , opens new tab said on Monday rival Quikrete would acquire the company in a deal valued at $11.5 billion, in a move to capitalize on higher demand for building materials.

The sector’s deal-making activity has been heating up due to rising U.S. government infrastructure spending and anticipation of growing material demand.

Summit had said in October it expected public infrastructure to remain a source of steady activity in 2025.

The company’s shares, however, have been trading at a discount to its industry peers such as Vulcan Materials (VMC.N), opens new tab and Martin Marietta Materials (MLM.N), opens new tab.

Privately held Quikrete approached Summit with an acquisition offer in October, Reuters had reported.

The concrete maker’s $52.50 per share offer represents an about 29.2% premium to Summit’s closing price a day before Reuters reported the talks.

Quikrete’s offer equates to an about $9.2 billion deal on an equity basis, according to a Reuters calculation.

Atlanta, Georgia-based Quikrete is one of the largest manufacturers of packaged concrete and cement mixes in North America.

Denver, Colorado-based Summit is a provider of construction materials such as cement, ready-mix concrete and asphalt.

Morgan Stanley and Evercore acted as financial advisors to Summit, while Davis Polk & Wardwell LLP served as its legal advisor.

Summit said in a regulatory filing on Monday that Quikrete had $9.2 billion of debt financing in place.

“Given several of Summit’s businesses, namely aggregates… Quikrete could look to shop some of its assets,” analysts said in a Jefferies note.

The analysts added Quikrete seemed most interested in Summit’s cement and ready-mix operations.

The transaction is expected to close in the first half of 2025.