Lone Star-Backed Continental Files for $200 Million IPO

Continental Building Products Inc., the gypsum-wallboard manufacturer acquired by Lone Star Funds this year, filed to raise $200 million in an initial public offering in the U.S.

The figure is a placeholder used to calculate fees and may change. Continental plans to use the proceeds for a fee payment to Dallas-based Lone Star, debt repayment and working capital, according to a filing dated today. Citigroup Inc. and Credit Suisse AG are among banks managing the offering.

Continental is planning the IPO after a construction rebound in the U.S., with new-home sales reaching the highest level since 2008 earlier this year. Growth in construction spending should spur the U.S. building-materials industry next year, Fitch Ratings said in a report this month.

Lone Star, which bought Continental from Lafarge SA (LG) in August for $700 million, will remain the controlling shareholder after the IPO. Continental was the Paris-based company’s North American gypsum business at the time of the sale. Reston, Virginia based Continental paid Lone Star a $130 million dividend, which it funded with borrowings, the filing shows.

Continental had sales of $287.9 million in the nine months through September, and adjusted earnings before interest, taxes, depreciation and amortization of $73.2 million.

Ebitda on that basis almost tripled from a year earlier, the company said in today’s filing. Adjusted Ebitda excludes costs paid by Lafarge before the sale and one-time expenses, including for the closing of a plant in Newark, New Jersey.

Barclays Plc, Deutsche Bank AG and RBC Capital Markets also are managing the sale. Continental plans to apply to list its shares on the New York Stock Exchange under the symbol CBPX.

The Standard & Poor’s Homebuilding Select Index rose 23 percent this year through today, extending a 56 percent advance in 2012 as the homebuilding recovery took hold.

To contact the reporter on this story: Mohammed Hadi in New York at mhadi1@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Mohammed Hadi at mhadi1@bloomberg.net

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