July 13, 2023

This paid piece is sponsored by Knife River South Dakota.

Knife River Corp., which has a significant construction materials and rail operation in Sioux Falls, is now an independently traded public company.

Knife River, trading under the ticker symbol “KNF” on the New York Stock Exchange, recently spun off from MDU Resources Group Inc. (NYSE: MDU), which it had been part of since the 1940s.

When the plan for the spinoff was announced in 2022, MDU Resources president and CEO David Goodin said the goal was to create “two best-in-class, pure-play companies” and to provide long-term value for the shareholders of both companies. The separation became official June 1.

This photo and the featured photo are courtesy of the New York Stock Exchange

Knife River, a member of the S&P MidCap 400 index, mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mix concrete, asphalt and other value-added products. It also distributes cement and asphalt oil and performs integrated contracting services.

It was founded in 1917 as a coal-mining company in west-central North Dakota – near the Knife River – and was acquired by MDU in 1945 to supply coal to its electric-generation plants. In 1992, Knife River acquired its first aggregates business and began the transition from coal to construction materials. Less than a decade later, the company was out of the coal business entirely. The company now is the fifth-largest producer of sand and gravel in the country.

“Knife River has grown into a leading construction materials provider, large enough to stand on our own as an independent, publicly traded company,” said Tony Spilde, senior director of communications.

“The new structure provides a number of benefits, starting with enhanced strategic focus and accountability as Knife River is able to pursue our own individualized strategy within the construction materials industry.”

Knife River also benefits from an ability now to optimize capital allocation for its unique needs, including the flexibility to deploy capital to specific growth opportunities.

“And there’s now a distinct new investor opportunity,” Spilde added. “The spinoff provides clarity for investors and an opportunity to invest directly in this industry.”

The same team and services remain in Sioux Falls, where Knife River acquired Concrete Materials, Ellis & Eastern Railroad and Rail to Road from the Sweetman family in 2018.

“Investing in Sioux Falls has been a great opportunity and truly one of our best acquisitions,” said Brian Gray, president and CEO of Knife River. “Not only are the Sweetman companies exceptionally well run, but this also got us into a very dynamic market with a lot of upside. Knife River is focused on being a leading provider in midsized, high-growth markets, and Sioux Falls is one of the best growth markets in the country.”

Sioux Falls also has a connection to Knife River in the form of longtime board member Tom Everist, who has served since 1995 on the MDU Resources board of directors and remains on the board of the newly spun-off company.

Everist brings key experience from a 44-year career in the construction industry and currently serves as president and chair of The Everist Company, an investment and land development business that previously was engaged in aggregate, concrete and asphalt production.

“Knife River started in the aggregates business over 30 years ago and ever since then has been building toward this moment,” Everist said of the spinoff. “It is a well-established company in an attractive industry, and it is positioned for profitable growth. I’m excited for Knife River’s future as a ‘pure-play’ construction materials and contracting company.”

There are “tremendous upsides in the construction industry,” he added.

“The work Knife River does matters and is essential to our nation’s success. Aggregate producers face challenges just like any industry, but they continue to demonstrate that the future is built on rock. I’m excited about the years to come.”

There is a lot to be excited about in the construction industry, Gray agrees.

“This is a great time to be in construction,” he said. “The federal government and our state governments have recognized the importance of investing in infrastructure. The American Society of Civil Engineers gives our national infrastructure a grade of C-minus, and our government officials see the value to the economy in improving our roads, bridges and runways. As a company that provides both construction materials and contracting services, we feel that we’re in a good position to help with this build-out.”

Knife River South Dakota president Clark Meyer agrees.

“Locally, we’re as busy as we’ve ever been and in the middle of a very solid construction season,” he said.

“The spinoff of Knife River into an independent public company only brings us more capacity to capture the opportunities ahead of us and continue to invest in the people we depend on to deliver for our customers.”

Knife River “is and always will be a people-first company, committed to being an employer of choice,” Gray said.

“We are in this excellent position to have gone off on our own because of our team members and the generations of Knife River employees who have come before us. Together, we have built our company into a respected industry leader. We are well established, and we now have greater flexibility to invest in our operations in key growth markets, including Sioux Falls.”