Kelso & Company, the New York-based middle market private equity firm, has partnered with industry veteran Rob Duke to launch Armada Materials, an aggregates and construction materials business headquartered near Tampa, Florida.
Rob Duke will serve as CEO and comes with deep industry experience after executive stints at CRH and Rinker Materials.
Kelso and Duke's game plan includes a heavy inorganic component. Heading the effort is fellow CRH alum Travis Raitt, joining the team as executive vice president of business development. Raitt was previously a vice president at at Macquarie Capital.
Armada's website already includes a page dedicated to winning over competitors who might be thinking about a potential exit.
A Base for Growth
Armada isn't a company formation starting from zero — serving as the base of the new platform is recently acquired Volunteer Materials, a vertically integrated producer of aggregates, asphalt, and ready-mixed concrete based in Lewisburg, Tennessee. Affiliates under the Volunteer umbrella include Volunteer Paving, Volunteer Sand & Gravel, Volunteer Concrete, Action Enterprise Co., and TMC Construction Services.
The acquisition gives Armada immediate access to limestone reserves located strategically along the I-65 corridor south of Nashville, an asset that industry commentators view as a meaningful competitive advantage.
Underwriting Federal Funds
Money from the Infrastructure Investment and Jobs Act, signed into law in November 2021, is now flowing into the system, according to operators. The bill could prove a significant tailwind, with new funding allocated for a wide array of infrastructure projects, including roads, bridges, and public transit.
Kelso and Armada will be keeping tabs on the several surface transportation programs authorized through 2027, including federal-aid highway funding.
While likely a significant near-term boost, federal funding is scheduled to fall off as Kelso nears its exit. The deal team will be hoping that market demand remains strong for a relatively cyclical business.
Kelso Stays Busy
Armada isn't the only announcement coming out of Kelso this week. On Monday the firm announced it closed Fund XI at $3.25 billion, surpassing its target.