Summit Materials Inc (NYSE:SUM) performed an initial public offering (IPO) that brought $400 million in proceeds. The funds generated through the IPO are expected to support the company’s general corporate needs and debt repayment. Shares of Summit Materials, a cement maker, gained in the public trading of the company.
Summit Materials Inc (NYSE:SUM) is controlled by Blackstone Group LP (NYSE:BX). The stake of Blackstone in the cement company is expected to decline to 57.4% following the IPO from nearly 79.5%.
Summit Materials Inc (NYSE:SUM) offered 22.2 million shares in the IPO, each priced at $18. The company also allowed the underwriters to make additional share purchases up to 3.3 million shares if they needed to cover overallotments. Goldman Sachs Group Inc (NYSE:GS) and Citigroup Inc (NYSE:C) participated in the offering as lead underwriters.
While the company expected the IPO to generate proceeds in the range of $377-$422 million, it ended up with $400 million. The money will now go into various corporate needs, which have not been specified. The portion of the money is also expected to go towards paying down the company’s outstanding debt. Summit had nearly $1.1 billion in total debt at the end of 2014.
The company generates most of its revenue at 56% from private construction projects and the rest of the revenue come from public construction sector. According to the regulatory filings, Summit Materials Inc (NYSE:SUM) has been able to acquire about 34 companies in the areas of asphalt, cement and concrete since initial financial injection from Blackstone. In addition to Blackstone, the other early investor in Summit is Silverhawk Capital Partners LLC.
Summit Materials Inc (NYSE:SUM) generated $1.2 billion of revenue in 2014 and $2.5 million in net income attributable to the company.
In the cement supply business, Summit competes with names such as Heidelberg Cement Plc and Holcim and Lafarge.
The CEO of Summit Materials Inc (NYSE:SUM) is man known as Tom Hill.