8-K: Haymaker SPAC to Merge with Suncrete in $973M Deal

Haymaker Acquisition Corp. 4 announced a definitive business combination agreement with Suncrete, a ready-mix concrete platform, valuing the combined entity at approximately $972.6 million.

Summary

• Haymaker Acquisition Corp. 4 (HYAC) has entered into a Business Combination Agreement with Concrete Partners Holding, LLC (Suncrete) to take Suncrete public.
• The transaction involves Haymaker changing its jurisdiction to Delaware, followed by a two-step merger where Suncrete will become a wholly-owned subsidiary of a new public entity, Suncrete, Inc. (PubCo).
• The combined company is anticipated to have a total enterprise value of approximately $972.6 million.
• A private placement (PIPE Investment) of approximately $82.5 million in PubCo Class A Common Stock and Pre-Funded Common Stock Purchase Warrants has been secured from institutional investors.
• Existing Suncrete equityholders and Haymaker's Sponsor and related parties have entered into support agreements, agreeing to vote in favor of the business combination and certain lock-up restrictions.
• The Business Combination is expected to close in the first quarter of 2026, subject to shareholder and customary closing conditions.
• PubCo and Suncrete intend to file a registration statement on Form S-4 with the SEC, including a proxy statement/prospectus for Haymaker's shareholder meeting.

Sentiment

Score: 9

Explanation: The filing presents a highly positive outlook on the proposed business combination, emphasizing Suncrete's strong market position, industry-leading profitability, robust growth strategy, and experienced management. The significant PIPE investment and favorable valuation metrics compared to industry peers contribute to a very optimistic sentiment, despite the standard inclusion of comprehensive risk factors.

Positives

• Suncrete is a scaled, tech-enabled logistics and products platform operating in a mission-critical segment of the construction market, with 49 plants and 352 mixer trucks.
• The company boasts industry-leading profitability with approximately 86% cash conversion and a 2026E Adjusted EBITDA margin of ~23% (compared to an industry average of 5-20%).
• Suncrete operates in the high-growth U.S. Sunbelt region, benefiting from attractive population, housing, and infrastructure growth tailwinds.
• The ready-mix concrete industry is highly fragmented, presenting significant opportunities for consolidation, and Suncrete has a substantial, actionable acquisition pipeline with $102M+ PF EBITDA under active discussion.
• SunTx Capital Partners, Suncrete's sponsor, has a proven track record, having sponsored Construction Partners, Inc. (NASDAQ: ROAD) which delivered a 10x increase in stock price since its IPO.
• Haymaker's leadership is experienced, with a four-time SPAC sponsor and three prior successful de-SPAC transactions.
• The transaction includes $82.5 million in PIPE commitments from institutional investors, providing significant funding capacity for future acquisitions.
• The pro forma enterprise value of $972.6 million represents an attractive 7.5x 2026E PF Adjusted EBITDA of $130.0 million.
• The company projects strong organic revenue growth of approximately 6% in 2026E, driven by volume and average selling price increases.

Negatives

• The filing does not explicitly state any negative aspects of the business combination or Suncrete's operations, focusing instead on potential risks and forward-looking statements.

Risks

• The Business Combination and PIPE Investment may not be completed in a timely manner or at all.
• Failure by the parties to satisfy closing conditions, including Haymaker's shareholder approval.
• Failure to realize the anticipated benefits of the Business Combination.
• Potential legal proceedings against PubCo, Suncrete, Haymaker, or others following the announcement.
• The level of redemptions by Haymaker's public shareholders may reduce public float, liquidity, or listing status.
• Failure of PubCo to obtain or maintain the listing of its securities on a stock exchange.
• Costs related to the Business Combination and becoming a public company.
• Changes in business, market, financial, political, and regulatory conditions.
• Risks related to Suncrete's anticipated operations and business, including the success of future acquisitions and integration.
• Issuances of equity or debt securities following the closing may adversely affect stock value and dilute stockholders.
• Difficulties managing growth and expanding operations after the Business Combination.
• Challenges in implementing the business plan due to lack of operating history, operational challenges, significant competition, and regulation.
• Suncrete's business depends on activity within the construction industry and the economic strength of its principal markets, subject to economic cycles.
• Substantial indebtedness could adversely affect financial condition.
• Highly competitive industry within local markets.
• Dependence on federal, state, and local government spending for public infrastructure construction.
• Cancellation of contracts, disqualification from bidding, and unpredictable timing of new project opportunities.
• Inability to accurately estimate risks, revenues, or costs on projects may lead to losses or lower profits.
• Profitability is sensitive to changes in volume due to capital-intensive nature and significant fixed/semi-fixed costs.
• Inflation and supply chain disruptions may result in increased costs that cannot be recouped.
• Inability to obtain or maintain sufficient bonding capacity.
• Business is seasonal and subject to adverse weather and climate conditions.
• Need to raise additional capital in the future, potentially on unfavorable terms or not at all.
• Use of estimates in accounting for significant items.
• Design-build contracts subject the company to risk of design errors and omissions.
• Challenges in hiring, training, and retaining qualified personnel and subcontractors.
• Failure of subcontractors to perform as expected.
• Departure of key personnel.
• Dependence on the supply chain for several key inputs.
• Failure to meet schedule requirements of contracts could affect reputation and expose to financial liability.
• Failure to obtain or maintain adequate insurance coverage.
• Failure to maintain safe work sites could result in significant losses.
• Operating results may vary significantly and be affected by cyclical markets.
• Significant downturn in the construction industry may result in goodwill impairment.
• Dependence on third parties for concrete equipment and materials.
• Large amounts of electricity and diesel fuel are subject to reliability issues, supply constraints, and price fluctuation.
• Delays or interruptions of transportation logistics.
• Significant disruption of information technology systems.
• Overall profitability is sensitive to price changes and variations in sales volumes.
• Material nonpayment or nonperformance by key customers.
• Inherent limitations in control systems, leading to undetected misstatements due to error or fraud.
• Operations are subject to changes in legal requirements and governmental policies.
• Government contracts are subject to regulations, violation of which could have a material adverse effect.
• Environmental laws and regulations and liabilities arising thereunder.
• Operations are subject to special hazards that may cause personal injury or property damage not covered by insurance.
• Failure to comply with immigration laws.
• Federal, state, and local employment-related laws and regulations could increase costs and lead to fines/lawsuits.
• Ready-mixed concrete segment's revenue from public works projects could be negatively impacted by decreased/delayed governmental spending.
• Governmental regulations, including environmental, may increase operating costs and capital expenditures.
• Material costs and losses from claims that products do not meet regulatory requirements or contractual specifications.
• Adoption of new accounting standards may affect financial results.
• Obligation to fund multi-employer defined benefit plans.
• The dual class structure of PubCo's common stock will concentrate voting power with SunTx and its affiliates, potentially depressing Class A common stock market value and limiting investor influence.
• Market price, trading volume, and marketability of PubCo's Class A common stock may be significantly affected by numerous factors beyond control.
• Future issuances of equity or debt securities, including for acquisition strategy, may adversely affect stock value and dilute stockholders.
• Future sales of Class A common stock may affect its market price.
• PubCo is expected to be a 'controlled company' under Nasdaq rules, meaning stockholders may lack certain corporate governance protections.
• Haymaker-specific risks: write-downs post-combination, sponsor/officer interests differing from shareholders, sponsor losing investment if no combination, conflict of interest in due diligence, failure to meet expectations, no maximum redemption threshold, substantial redemptions, little information on private company, no independent fairness opinion, sponsor influence on vote, adverse tax consequences, sponsor/affiliates purchasing shares to influence vote, limited remedies for shareholders, failure to complete by deadline, leverage of target businesses, wasted resources, directors not enforcing indemnification, third-party claims reducing trust, bankruptcy risks, shareholder liability for claims.
• Redemption-specific risks: 15% redemption limit, shareholder decision not putting them in better position, specific redemption requirements, completion even with substantial disagreement, 1% U.S. federal excise tax.

Future Outlook

The combined company, Suncrete, Inc., anticipates significant growth by executing a proven and repeatable strategy to gain scale in the highly fragmented U.S. ready-mix concrete industry. This growth will be driven by both organic expansion and strategic acquisitions, particularly within the high-growth Sunbelt region. Management expects to benefit from attractive population, housing, and infrastructure growth tailwinds, maintaining industry-leading profitability and cash conversion. The PIPE investment and potential incremental debt financing are intended to fund future acquisitions, with a substantial pipeline already identified.

Management Comments

• Ned N. Fleming, III (Founding Partner of SunTx): "This strategic transaction positions Suncrete as a leading publicly traded ready-mix concrete platform across Oklahoma and Arkansas with plans to expand throughout the rapidly growing U.S. Sunbelt region."
• Ned N. Fleming, III: "Suncrete's leadership team is top-tiered and has grown the business in excess of twenty percent annually since its inception in 2008 by executing a proven, repeatable and scalable strategy of growing local relative market share, entering new markets with accretive acquisitions, and operating with an industry-leading margin profile."
• Ned N. Fleming, III: "Combining with Haymaker provides a professional, sophisticated and experienced strategic partnership. This partnership has been critical to achieving commitments from institutional investors of $82.5 million in a common stock private placement, which provides considerable runway to execute the Company's growth objectives."
• Randall Edgar (CEO of Suncrete): "We are pleased to partner with SunTx, and we greatly value their participation in our shared vision. We are also excited to enter the public markets, and we aim for profitable growth to enhance shareholder value."
• Randall Edgar: "We believe we cultivate a competitive advantage in our service to customers by making our people, culture, and safety top priorities. Through this approach, we are able to leverage scale to be a leader in our local markets, improve purchasing power and apply operational best practices across our footprint."
• Andrew R. Heyer (Vice President of Haymaker): "We are thrilled to partner with Suncrete and its impressive and experienced operational leadership team to scale a leading ready-mix concrete logistics and distribution platform company in the high-growth Sunbelt region of the United States."
• Andrew R. Heyer: "We see a tremendous market opportunity in the ready-mix concrete industry, and we look forward to working with Suncrete and SunTx to achieve our mutual goals."

Industry Context

The ready-mix concrete industry is characterized by highly fragmented and localized markets, with over 3,000 concrete plants in the Sunbelt region and a generational ownership transfer in progress. This fragmentation, coupled with limited acquirers, creates a compelling opportunity for strategic consolidation. Suncrete is positioned to capitalize on this by leveraging its hub-and-spoke operating model, tech-enabled logistics, and established relationships. The company benefits from strong macroeconomic tailwinds in the U.S. Sunbelt, including attractive population growth, housing demand, and significant infrastructure investment (e.g., IIJA funding, onshoring of manufacturing). Suncrete's strategy of serving infrastructure, commercial, and residential end markets provides a durable and resilient business model.

Comparison to Industry Standards

• Suncrete's projected 2026E Adjusted EBITDA margin of ~23% is significantly higher than the industry average of 5-20% for typical competitors, indicating superior operational efficiency.
• The company's projected 2026E Free Cash Flow Conversion of ~86% is notably higher than the median of 64.5% for 'Business Line Peers' and 88.6% for 'Earnings Compounders', demonstrating strong cash generation.
• Suncrete's Enterprise Value / 2026E PF Adjusted EBITDA multiple of 7.5x is considerably lower than the median of 20.9x for 'Earnings Compounders' and 11.9x for 'Business Line Peers', suggesting a potentially attractive valuation relative to its profitability and growth profile.
• The company's 2026E EBITDA Growth (23.9%) and Revenue Growth (24.5%) are substantially higher than the median for both 'Business Line Peers' (10.0% EBITDA, 6.2% Revenue) and 'Earnings Compounders' (10.8% EBITDA, 10.6% Revenue), indicating a more aggressive growth trajectory.
• Suncrete's truck utilization, measured by yards per driver hour, is 11% higher than the industry average, per NRMCA benchmarking survey, highlighting operational excellence.

Corporate Governance

Legal Proceedings

• The filing mentions the risk of 'any potential legal proceedings that may be instituted against PubCo, Suncrete, Haymaker or others following announcement of the Business Combination,' but does not disclose any current or ongoing legal proceedings.

Related Party Transactions

• Suncrete, PubCo, SPAC, and certain equityholders of Suncrete entered into Company Equityholder Support Agreements, where Suncrete equityholders agreed to vote in favor of the Business Combination and adhere to lock-up restrictions.
• The Sponsor and certain officers and directors of SPAC (Sponsor Related Parties) entered into a Sponsor Support Agreement with Suncrete and PubCo, agreeing to vote in favor, waive anti-dilution rights, and adhere to lock-up restrictions. This supersedes a previous letter agreement dated July 25, 2023.

Stakeholder Impact

• Shareholders of Haymaker: Will vote on the business combination, face potential dilution from future equity issuances, and may experience market price volatility. Those holding Class A ordinary shares may redeem them, impacting liquidity and public float.
• Existing Suncrete Equityholders: Will receive Class B shares with concentrated voting power (10 votes per share), maintaining significant control over the combined entity.
• PIPE Investors: Will acquire PubCo Class A Common Stock and warrants, providing capital for growth and becoming new shareholders in the public entity.
• Employees: Suncrete's culture is built on respect, integrity, and a people-first approach, with a focus on hiring, training, and retaining qualified personnel. The growth strategy implies potential for expanded employment opportunities.
• Customers: Suncrete aims to be a trusted partner, providing high-quality service and a full spectrum of project capabilities, benefiting from its local market leadership and scale.
• Suppliers: Suncrete maintains long-standing, mutually beneficial relationships with top suppliers, driven by consistent demand and professionalized operations, which are expected to continue and strengthen with growth.
• Creditors: The combined entity will have substantial indebtedness, including a $206 million debt rollover and $125.1 million in incremental debt financing, which will impact the company's financial condition and obligations.

Next Steps

• PubCo and Suncrete intend to file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus.
• Haymaker's shareholders will hold a meeting to vote on the Business Combination Agreement and related transactions.
• Certain Suncrete equityholders will also vote on the approval and adoption of the Business Combination.
• The Business Combination is expected to be completed in the first quarter of 2026.
• Suncrete plans to execute its acquisition strategy, leveraging the proceeds from the PIPE investment and potential incremental debt financing.

Key Dates

Recommendation

The proposed business combination presents a compelling investment opportunity. Suncrete operates in a fragmented, high-growth industry (ready-mix concrete in the U.S. Sunbelt) with strong tailwinds from population growth, housing demand, and infrastructure spending. The company demonstrates industry-leading profitability (23% Adj. EBITDA margin, 86% FCF conversion) and a proven, repeatable acquisition strategy, backed by an experienced management team and a successful sponsor (SunTx Capital Partners). The valuation at 7.5x 2026E PF Adj. EBITDA is attractive compared to industry peers, and the $82.5 million PIPE commitment provides substantial capital for future accretive acquisitions. While risks associated with SPAC transactions and integration exist, the strategic rationale, financial profile, and growth potential make this a 'strong buy' for long-term investors seeking exposure to the construction materials sector.

Keywords

Ready-mix concrete, Construction materials, SPAC merger, Business combination, Sunbelt region, Infrastructure, Acquisition strategy, Private placement, PIPE investment, Haymaker Acquisition Corp. 4, Suncrete, SunTx Capital Partners, Logistics, Distribution, Building materials, Public listing, NYSE