Sources: CP staff; Forterra Inc., Irving, Texas
Water and wastewater infrastructure-geared Forterra Inc., a recently established entity emanating from Forterra Building Products, details in U.S. Securities & Exchange Commission filings an initial public offering of 18.4 million shares priced in the $19-$21 range. Success in the impending sale would give new investors and principal owner Forterra US Holdings LLC, respectively, 29 percent and 71 percent stakes in a 96-plant operation with annual sales of about $1.6 billion across Drainage Pipe & Precast Products and Water Transmission Pipe & Products segments.
Forterra US Holdings is controlled by Lone Star Fund IX (U.S.), L.P., part of a family of investments under a private equity specialist with offices in Dallas, New York and Europe. Lone Star acquired the former Hanson Building Products from HeidelbergCement AG in March 2015, rebranding its Pipe & Precast, Pressure Pipe and Bricks businesses under the Forterra banner six months later. Lone Star positioned Forterra Building Products to close upward of $1 billion in deals in less than 18 months. It extended the pipe & precast footprint in the Upper Midwest and Tennessee by acquiring Cretex Concrete Products and Sherman-Dixie Concrete, and created a complementary water transmission segment through the acquisition of ductile iron pipe leader U.S. Pipe Inc.
Ahead of the IPO, Lone Star officials have streamlined the Forterra portfolio around water and wastewater transmission and conveyance products and structures, and separated legacy, United Kingdom-centered Hanson Bricks production and distribution assets. Their SEC filing presents Forterra Inc. as the largest producer, by sales volume, of concrete drainage pipe and precast (70 plants), plus concrete pressure and ductile iron pipe (26 plants), in the United States and Eastern Canada. The company notes that the Drainage Pipe & Precast Products segment accounts for 47 percent of sales, Water Transmission Pipe & Products for 53 percent.
“Our extensive suite of end-to-end products covers ‘the First Mile to the Last Mile’ of the water infrastructure grid, ranging from large diameter pipe that transports water to and from treatment centers and manages drainage along major transportation corridors, to smaller diameter pipe that delivers potable water to, and removes wastewater from, end users in residential and commercial settings,” Forterra tells investors. “We employ a specialized technical salesforce, including engineers and field service representatives, which enables us to deliver a high degree of customer service, create tailored solutions and ensure our products meet project specifications to maximize applications in the field. Our product breadth, footprint in the United States and Eastern Canada and significant scale help make us a one-stop shop for water-related pipe and products, and a preferred supplier to a wide variety of customers, including contractors, distributors and municipalities.”
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