Sources: Forterra Inc., Irving, Texas; CP staff
Delaware Court of Chancery has granted Forterra attorneys’ motion to dismiss a lawsuit that HeidelbergCement AG affiliates had filed over earn-out contingency fees tied to the $1.2 billion sale of the former Hanson Building Materials. Terms called for buyer Lone Star Fund IX (U.S.), L.P. to pay an additional sum for the 67-plant business, up to $100 million, depending on fiscal 2015 EBITDA (earnings before interest, taxes, depreciation and amortization) thresholds.
The Court ruled that a) an independent accounting arbitrator appointed per the acquisition agreement has jurisdiction over the EBITDA calculation, including what information can be considered as part of such accounting; and, b) plaintiffs’ indemnification claims are barred due to a contractual statute of limitations. The ruling can be appealed, Forterra officials note, while the earn-out calculation remains subject to arbitrator analysis of the producer’s 2015 financials.
Dallas-based Lone Star Fund IX adopted the Forterra identity in late 2015 and closed nearly $1 billion in bolt-on transactions ahead of an October 2016 initial public offering.