Summit Materials investors eye $375M from initial public offering

Sources: CP staff; Summit Materials LLC, Denver; Renaissance Capital LLC, Greenwich, Conn.

Trading of the newest major operator with U.S. concrete, cement and aggregate production, Summit Materials, has commenced on the New York Stock Exchange, as CEO Tom Hill rang the March 12 Opening Bell. After a requisite quiet period since a mid-December Securities and Exchange Commission filing, Summit Materials sponsors offered 22.2 million shares at $18/share.


The producer was founded in 2009 with an acquisition-driven business plan and commitments approaching $800 million, led by New York private equity giant Blackstone Group. It spans 200-plus plants in 17 states and British Columbia under East, Central and West regions, and counts as its top asset a majority stake in Missouri’s Continental Cement. Summit Materials closed 2014, its fifth full year of operation, reporting sales of $1.2 billion from 2.8 million yd. of ready mixed, 1 million tons of cement, 25.4 million tons of aggregates, and 4.3 million tons of asphalt.

Consistent with an acquisition and integration model he honed in 25-plus years at Oldcastle Materials, founder and CEO Tom Hill has positioned key concrete, aggregate and asphalt businesses as platform or operating companies. On their own, or through bolt-on transactions of smaller producers, Summit Materials estimates that each operating company is among the top three aggregate, concrete or asphalt producers in its market. Major businesses with ready mixed production include Alleyton Resource, Houston; Con-Agg, Missouri; Cornejo & Sons, Kansas; and, Kilgore Cos., Utah.

“Our acquisition strategy has helped us to achieve scale and rapid growth, and we believe significant opportunities remain for growth through acquisition [with] approximately 65 percent of the U.S. construction materials market privately owned,” the producer notes in prospective-investor guidance. “Our senior management team maintains contact with over 300 private companies … Long-standing relationships have been the primary source for our past acquisitions and, we believe, will be a key driver of our future growth. We believe the value proposition to potential sellers has made us a buyer of choice.”

Summit Materials reports debt just over $1 billion, a figure that could drop to about $765 million with sponsors’ allocation of IPO proceeds. The public offering coincides with an overall robust stock market, plus strong valuation of considerably larger, domestic peers Martin Marietta Materials and Vulcan Materials, whose shares are trading at levels last seen before the recession.

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