Sources: Forterra Inc., Irving, Texas; CP staff
A neutral accounting arbitrator has determined that no earnout payment from concrete pipe and precast giant Forterra is due to HeidelbergCement AG under terms of a 2015 Hanson Building Products business spinoff, initially valued at $1.2 billion. HeidelbergCement had sought a $100 million earnout payment based on the fiscal 2015 performance of Hanson Building Products, whose Dallas-based suitor, Lone Star Fund IX (U.S.) LP, adopted the Forterra brand. The Delaware Court of Chancery deferred an EBITDA (earnings before interest, taxes, depreciation and amortization) calculation—central to the earnout payment clause—to the arbitrator in conjunction with a late-2017 dismissal of a HeidelbergCement suit.
“We have consistently held the view that no earnout payment was owed in this matter,” says Forterra CEO Karl Watson, Jr. “We look forward to moving on from this and continuing to execute on five improvement pillars which have created significant momentum over the past several quarters. Comparing our recent second quarter 2020 results to the second quarter of 2019, in each case on a last 12-month basis, we have increased our sales by 7 percent, gross profit by 26 percent, improved from a net loss of $34 million to net income of $28 million.”