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.
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.
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