After leaving the industry in July 2008, longtime Oldcastle Inc. and CRH Americas executive Tom Hill actually did manage to take some well-earned time
After leaving the industry in July 2008, longtime Oldcastle Inc. and CRH Americas executive Tom Hill actually did manage to take some well-earned time off. Still, it seemed almost destined that he would return to the world of construction materials eventually. Being in the industry, it’s in the blood, a little bit addictive, he says. Less than a year after his Oldcastle departure, Hill was back meeting with private equity firms and other potential investors in what would become his new acquisition-driven firm Summit Materials, LLC.
The first person Hill talked with about his new construction materials outfit was an old Duke University fraternity brother, Ted Gardner of equity group Silverhawk Capital Partners, who suggested borrowing the Oldcastle template of acquiring promising companies, and combining best practices from each of the new operations. Hill and Gardner went to New York to raise money for the overhead Û the equivalent of two years of salary. The bulk of the seed money Û $750 million of equity Û came from asset management giant The Blackstone Group, making Summit its first construction industry investment to date.
By September 2009, Hill had raised about $800 million and Summit made its first acquisition, a Bank of America-funded deal for Hamm Inc., an aggregate, asphalt, landfill and roadbuilding operator in Perry, Kan. In a move consistent with many transactions Hill oversaw while heading Oldcastle Materials Group, Oldcastle Inc. and, most recently, CRH Americas, Summit’s charter business will remain under current management, including regional manager Damian Murphy and former owner Rod Hamm.
With accident and lost time prevention a top priority for Summit, as it was for Oldcastle, the company is introducing new processes and systems to Hamm Inc. to further improve what Hill saw as an already a strong safety culture. The Oldcastle processes reduced incident rates by 80 percent, and the people at Hamm know that safety is our number one priority, he says.
Joining Hill on the Summit management team is a host of starters, most of whom had worked with him before at Oldcastle and CRH. Michael Brady is executive vice president; Tony Keenan, chief financial officer; Anya Fonina, vice president of development; Damian Murphy, regional president; Rod Gamble, vice president of operations; Brie Wode, finance manager; and Angela Dziubek, business manager and executive assistant. The group includes colleagues who participated in more than 150 transactions during Hill’s 23 years with Oldcastle and CRH Americas.
On the Summit board of directors are Silverhawk’s Gardner; Chip Goodyear, the former CEO of BHP Billiton, the world’s largest mining company and a Summit investor; and Neil Simpkins and Julia Carr of Blackstone, which has been looking to grow into the heavy materials market for years. Our board has 60 years of experience and relationships, and our focus will be on acquiring private companies, says Hill. There are many companies that we have developed relationships with, both personal and professional, over the years. We’d be disappointed if we didn’t complete further deals in the coming months.
Hill admits to running and building Summit much like Oldcastle did business. We want to buy good companies with strong management teams, and give them the capital to expand, improve safety, share best practices, and share pricing methodologies, he explains. We’re interested in all construction materials markets, including aggregate, asphalt, paving, construction, ready mixed concrete and concrete products, especially pipe and precast. We’re going to keep building Summit until we can take it public, which means we’re looking to invest $1.6 billion to build a multi-billion-dollar business.
Hill says Summit will initially keep its market scope for acquisitions to North America, where it can be the Number 1 or 2 player. In some markets, there has been so much consolidation that they simply are not attractive to us, states Hill.
With memberships in The American Road & Transportation Builders Association (Hill is currently ARTBA’s treasurer) and the National Asphalt Pavement Association, as well as plans to join all other major construction-related trade groups, Summit will stay involved with industry issues and regulatory changes, including highway bill reauthorization. Our office is in Washington, D.C., just two blocks from ARTBA, so we plan on being an active part of the debate, says Hill.