In the late 1990s, Jacksonville-based Florida Rock Industries Inc. began an expensive and sometimes controversial expansion into the cement business.
Now Vulcan Materials Co., which acquired Florida Rock for $4.2 billion in 2007, is selling off the former Florida Rock cement facilities for a fairly big price.
Vulcan announced an agreement Thursday to sell its Florida cement and concrete operations to Colombia-based Cementos Argos for $720 million in cash.
The sale includes a cement plant in Newberry that was opened by Florida Rock in 1999. That $100 million plant generated a lot of controversy as Florida Rock's application to build it was opposed by Alachua County residents on environmental concerns.
The sale also includes cement terminals and grinding facilities in Tampa and Port Manatee that were acquired by Florida Rock from Lafarge Florida Inc. in 2003 for $122 million.
Besides those cement facilities, Vulcan is also selling 69 ready-mixed concrete sites and 13 concrete block and building material sites in Florida and South Georgia to Cementos Argos.
Vulcan said all of the assets it is selling generated $153 million in net sales but a net loss of $1 million before interest, taxes, depreciation and amortization in the nine-month period ended Sept. 30.
"Divesting these non-core cement and concrete assets, at a full and fair valuation, allows us to further enhance our financial strength and strategic focus as the leading aggregates producer in the fastest-growing regions and urban markets of the United States," Vulcan CEO Don James said in a news release.
Vulcan intends to use part of the proceeds to pay off $500 million in debt. It is also spending $117 million to exercise an option to buy a quarry in Southern California that the company has been operating under a lease.
The company said including this deal, it will have raised more than $1 billion from selling off non-core assets since last year, enabling it to pay off almost $800 million in debt and investing $240 million in quarries, which it mines for construction materials aggregates.
Vulcan's stock jumped as much as $2.80 to a 52-week high of $62.40 Thursday after the sale announcement.
Florida Rock's main business also was mining for construction aggregates, but it saw a big opportunity in the 1990s to expand the cement business to supply Florida's construction industry.
Cementos Argos, which already operates cement and concrete plants in nine Southeastern U.S. states, sees it the same way.
"This new transaction fits perfectly with the company's growth strategy, not only for the size and quality of the assets but also because of its privileged location, the potential and its complementary operation with our current assets," CEO Jorge Mario Velásquez said in a news release.
"We are duplicating our cement production capacity in the United States, in a market like Florida, where the growth forecast for the coming years is expected to double the already encouraging growth estimates of the country," he said.
Vulcan currently employs nearly 1,000 people throughout Florida, including 60 in its Jacksonville office, which is the headquarters for the company's southern region. Vulcan restructured into four operating regions two years ago.
Some of the Florida employees will likely wind up with Cementos Argos after it takes over the facilities, but a Vulcan spokeswoman could not comment on how the sale may affect the Jacksonville regional office.
McKesson deal on again
Hopefully this is the last time we'll have to talk about this but for the third consecutive week, there's been a shift in direction for McKesson Corp.'s proposed acquisition of German pharmaceutical distributor Celesio AG. Now the deal is on again.
Three weeks ago, McKesson upped its offer to buy Celesio to get one major shareholder to agree, but two weeks ago the company said its offer still wasn't accepted by holders of 75 percent of Celesio shares, which was a requirement of the deal.
Last week, San Francisco-based McKesson said it now has agreements with Celesio's two largest shareholders, which will ensure it gets more than 75 percent support. That means the deal will be completed after all.
McKesson, which acquired Jacksonville-based PSS World Medical Inc. a year ago, has said the Celesio merger will create a company with annual revenue of more than $150 billion, with about 81,500 employees in more than 20 countries.
Coach reports disappointing earnings
The roller coaster that is Coach Inc.'s stock took another plunge last week after a disappointing earnings report.
The handbag and fashion accessories company, which has a major distribution center in Jacksonville, reported earnings of $1.06 a share for the second quarter ended Dec. 28, 17 cents lower than the previous year and 5 cents lower than the average forecast of analysts surveyed by Thomson Financial.
Total sales fell 6 percent to $1.42 billion, about $60 million below the average analysts' forecast. Comparable-store sales at its North American stores dropped 13.6 percent. Comparable-store sales are sales at stores open for more than one year and are a key indicator of a retailer's performance.
International sales rose 2 percent, with Coach seeing strong growth in emerging Asian markets and in Europe.
However, that was offset by "substantially lower traffic" in its North American stores, with weakness in the North American women's bags and accessories business.
Coach's stock has been moving up and down for the past year and a half, but the stock has recently been trading well below its highs near $80 two years ago. It fell $3.17 to $49.38 Wednesday after the earnings report.
Coach has historically had a strong brand, but analysts say the company is being hurt by growth at competitors such as Michael Kors Holdings Ltd.
"The market for premium handbags in North America grew in the high single digit range, yet Coach's North American business declined by a high single digit range. This suggests to us that the brand lost 4 points of market share or more in the quarter," Macquarie Capital analyst Liz Dunn said in a research report.
Dunn downgraded her rating on Coach from "outperform" to "neutral," saying she doesn't see a turnaround until at least the fall.
"In our view, Coach's issue is not simply one of having the right product in the stores. Instead it's about improving brand perception, which will likely be a slower process than just getting new product in the stores. Brand building (and rebuilding) takes time," she said.
"We believe the company is pursuing the right strategies. We like the marketing direction and the refresh of stores. We believe in the brand and management. But we are not sure results have bottomed and would prefer to wait for more visibility to the turn."
Johnson & Johnson forecasts disappointing earnings
Johnson & Johnson last week reported fourth-quarter adjusted earnings of $1.24 a share, 5 cents higher than the previous year and 4 cents higher than the average analysts' forecast. However, its stock dropped Tuesday because the New Jersey-based health care products company forecast 2014 earnings slightly lower than analysts' expectations.
While the average analysts' forecast was $5.86 a share, according to Thomson, Johnson & Johnson said it is looking for $5.75 to $5.85 this year. That sent its stock down by $1.03 to $94.03 Tuesday, but the stock was trading near its record high of $95.99 before the earnings report.
Johnson & Johnson's Jacksonville-based contact lens subsidiary, Vistakon, reported lower sales for the fourth quarter and for all of 2013, but only because of the negative impact of foreign exchange rates on its international sales.
Vistakon's fourth-quarter sales fell 3.5 percent to $719 million, and full-year sales dropped 2 percent to $2.9 billion. However, excluding the currency impacts, on an operational basis, Vistakon's sales rose by 2.6 percent in the fourth quarter and 3.3 percent for all of 2013, the company said.
Johnson & Johnson's total fourth-quarter sales rose 4.5 percent to $18.4 billion but excluding the currency impact, operational sales rose 6.3 percent.
Former Neiman Marcus CEO joins Stein Mart board
Stein Mart Inc. last week announced it has added the former CEO of The Neiman Marcus Group to its board of directors.
Burton Tansky worked at the upscale department store chain for 23 years, serving as CEO from 2001 until his retirement in 2010.
Tansky currently serves as a senior adviser of Marvin Traub Associates, a global retail consulting firm.
Jacksonville-based Stein Mart operates stores that promote high-end fashion at prices competitive with off-price retailers.
According to a Dallas Morning News profile of Tansky when he retired, his "steadfast belief in maintaining Neiman Marcus' focus on high-priced designer goods, for knowing his customer still desired the best, is one of Tansky's legacies."
However, he is undoubtedly an asset to Stein Mart's board.
"With an exceptional retail career and tremendous business experience, his guidance will be invaluable to us," Stein Mart Chairman and CEO Jay Stein said in a news release.