Heidelberg signals NYSE listing for Hanson Building Products spinoff

Sources: Heidelberg Cement AG, Germany; CP staff

Citing improved residential, commercial and infrastructure market prospects on both sides of the Atlantic, Heidelberg Cement officials have outlined an initial public offering of recently chartered Hanson Building Products Ltd., spanning North American and U.K. pipe, precast, brick and roof tile production assets inherited in the 2007 takeover of Hanson Plc.

A U.S. Securities and Exchange Commission registration statement paves the way for New York Stock Exchange trading of Hanson Building Products shares. The business closed a fiscal year June 30 with $1.15 billion in sales and $104.3 million in pro forma adjusted EBITDA, Heidelberg notes, projecting 6 to 10 percent annual growth in product segment shipments over the near term. The filing does not specify a target IPO date or share price, but suggests Heidelberg would maintain a stake in the entity, provide it administrative and back office support functions in the interim, and effect a cement supply arrangement for the concrete operations.

Although existing management of Hanson Pipe & Precast, Pressure Pipe and Brick businesses—88 U.S. and Canadian plants plus 19 U.K. plants and distribution sites—is centered in Irving, Texas, amid Lehigh Hanson Inc. headquarters, the Heidelberg registration statement indicates that Hanson Building Products Ltd. will have executive offices in Great Britain.

“As a public company, we will be able to pursue our own distinct operating priorities and strategies, including new organic growth opportunities designed to increase net sales and profitability,” Heidelberg officials note in their SEC filing, pointing most immediately to capital investment in steel pressure pipe and clay brick production capacity in Texas and the U.K., respectively. “We also expect to continue to selectively enter new geographies in our pressure pipe and gravity pipe and precast businesses, leveraging our sales and distribution platforms, engineering capabilities and existing customer relationships. As a public company, we also expect to improve performance through greater cost efficiencies … [benefitting] in the areas of raw material purchasing, information technology systems and hedging practices.”

Led by CEO Plamen Jordanoff, Hanson Building Products’ 10-member senior management team has an average of 18 years’ industry experience. Members oversaw or supported 31 merger and acquisition transactions from 2003-2007, positioning the company with leading or strong stakes in each of its product segments, especially North American concrete gravity and pressure pipe.

“We intend to selectively pursue acquisitions of businesses we believe are a complementary geographical or product offering fit with our existing operations and that provide an opportunity to generate attractive returns,” Heidelberg notes in the SEC filing. “We believe there are numerous current acquisition opportunities and significant synergies will be available upon acquisition. Additionally, we believe there are opportunities for joint ventures offering efficiencies while involving low capital requirements.”