Forterra, Inc. (“Forterra” or “the Company”) (NASDAQ:FRTA), a
leading manufacturer of water and drainage infrastructure pipe and
products in the United States and Eastern Canada, today announced
that it has entered into a definitive agreement under which
Quikrete Holdings, Inc. (“Quikrete”) will acquire all outstanding
shares of Forterra for $24.00 per share in an all cash transaction
valued at approximately $2.74 billion, including outstanding debt.
The transaction, which was unanimously approved by the Forterra
Board of Directors, represents a premium of approximately 38.5% to
Forterra’s 90-day volume-weighted average share price on February
19, 2021. Upon completion of the transaction, Forterra will become
a privately held company.
“Forterra and Quikrete are an ideal strategic fit, and this
combination is a natural next step for our company, enabling us to
better serve our customers across the company on their concrete
projects from start to finish. We are excited to grow our
capabilities in the potable water distribution market through
Forterra’s well-respected U.S. Pipe business,” said Will Magill,
CEO of Quikrete Holdings, Inc. “We are excited to welcome the
Forterra team and bring our two great companies together.”
“We are pleased to announce this transaction with Quikrete,
which delivers a compelling cash premium to our shareholders,” said
Forterra CEO Karl Watson, Jr. “We admire Quikrete’s impressive 80
year history and commitment to delivering superior service and
products to customers. Over the past two years, we have made
significant progress executing on our five improvement pillars of
safety, plant-level operational discipline, enhanced commercial
capabilities, working capital efficiency, and general and
administrative expense effectiveness. Today’s announcement advances
that progress and is a testament to our team members’ hard work and
commitment to Forterra. We look forward to working with Quikrete to
build on our positive momentum and achieve even greater success
together.”
“Following a thorough review of the opportunities available to
Forterra to deliver the greatest value to shareholders, the
Forterra Board of Directors unanimously determined that entering
into this agreement with Quikrete and becoming a private company
again is the best path forward to maximize value,” said Chris
Meyer, Chairman of the Forterra Board. “The transaction with
Quikrete represents an exciting new chapter for Forterra – one that
could not have been achieved without the leadership from the entire
management team and the dedication of all Forterra team
members.”
In light of this announcement, Forterra will issue earnings as
planned after the close of business February 24, 2021, but will not
be hosting its previously announced fourth quarter and full year
2020 earnings conference call on February 25, 2021.
Approvals
An affiliate of Lone Star Funds (“Lone Star”), a global private
equity firm, acquired Forterra in 2015 and has maintained a
majority ownership since the Company’s initial public offering in
2016. Following execution of the merger agreement, Lone Star, which
owns approximately 53% of the Company’s outstanding shares of
common stock, approved the transaction by written consent. No
further action by Forterra’s shareholders is needed or will be
solicited in connection with the merger.
The transaction is expected to close in the fourth quarter of
2021, subject to customary closing conditions, including receipt of
clearance under the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
Advisors
Citi is serving as financial advisor to Forterra, and Gibson,
Dunn & Crutcher LLP is serving as legal counsel for the
transaction, with Kirkland & Ellis LLP serving as regulatory
counsel. Goldman Sachs & Co. LLC is serving as exclusive
financial advisor to Quikrete and Troutman Pepper Hamilton Sanders
LLP is serving as legal counsel for the transaction, with King
& Spalding LLP serving as regulatory counsel. Wells Fargo has
provided a debt financing commitment for an incremental loan to
finance the transaction.
About Forterra
Forterra is a leading manufacturer of water and drainage pipe
and products in the U.S. and Eastern Canada for a variety of
water-related infrastructure applications, including water
transmission, distribution, drainage and stormwater systems. Based
in Irving, Texas, Forterra’s product breadth and scale help make it
a preferred supplier for water-related pipe and products, serving a
wide variety of customers, including contractors, distributors and
municipalities. For more information on Forterra, visit
http://forterrabp.com.
About Quikrete Holdings, Inc.
Quikrete Holdings, Inc. is a privately owned family business
founded in 1940. It is a leading buildings materials company based
in Atlanta, Georgia. Quikrete’s portfolio ranges from its iconic
Quikrete branded concrete and mortar mixes to precast and steel
pedestrian and vehicular bridges. This includes brands such as
Quikrete, Spec Mix, QPR, Pavestone, Custom Building Products,
Rinker Materials, and Contech Engineered Solutions. The business’
products include packaged cementitious products, pavers, retaining
wall systems, masonry units, tile grouts and thin sets, concrete
pipe and box culverts, corrugated metal pipe, engineered storm
water systems, and structural precast and steel pedestrian and
vehicular bridges. Quikrete services the US and Canadian new
construction and repair and remodeling residential, commercial, and
infrastructure markets.
Cautionary Note Regarding Forward-Looking
Statements
This communication contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In some cases, forward-looking statements can be
identified by words such as “approximately,” “anticipate,”
“assume,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “future,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “seek,” “should,” “target,”
“will” and similar terms and phrases. All forward-looking
statements are subject to risks and uncertainties that may cause
actual results to differ materially from those expected, including:
risks associated with transactions generally, such as the inability
to obtain, or delays in obtaining, required approvals under
applicable anti-trust legislation and other regulatory and third
party consents and approvals; the failure to consummate or delay in
consummating the merger for other reasons; the risk that a
condition to closing of the merger may not be satisfied; the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; the outcome
of any legal proceedings that may be instituted following
announcement of the merger; failure of Quikrete to obtain any
financing required to consummate the merger; failure to retain key
management and employees of the Company; issues or delays in the
successful integration of the Company’s operations with those of
Quikrete, including incurring or experiencing unanticipated costs
and/or delays or difficulties; unfavorable reaction to the merger
by customers, competitors, suppliers and employees; and additional
factors discussed in the Company’s filings with the Securities and
Exchange Commission (the “SEC”). The
forward-looking statements contained in this communication are
based on current plans, estimates and expectations in light of
information currently available to the Company and are subject to
uncertainty and changes in circumstances. There can be no assurance
that future developments affecting the Company will be those that
the Company has anticipated. Actual results may differ materially
from these expectations due to changes in global, regional or local
political, economic, business, competitive, market, regulatory and
other factors, many of which are beyond the Company’s control, as
well as the other factors described in Item 1A, “Risk Factors” in
the Company’s 2019 10-K filed with the SEC on February 27, 2020, as
supplemented in Item 1A. “Risk Factors” of the Company’s Quarterly
Report on Form 10-Q filed with the SEC on October 29, 2020. The
COVID-19 pandemic may also precipitate or exacerbate these and
other unknown risks and uncertainties. Additional factors or events
that could cause the Company’s actual results to differ may also
emerge from time to time, and it is not possible for the Company to
predict all of them. Should one or more of these risks or
uncertainties materialize or should any of the Company’s
assumptions prove to be incorrect, actual results may vary in
material respects from what the Company may have expressed or
implied by these forward-looking statements. Any forward-looking
statement made by the Company speaks only as of the date on which
it is made. The Company undertakes no obligation to publicly update
any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by applicable securities laws.
Additional Information and Where to Find It
The Company will prepare an information statement on Schedule
14C for its stockholders with respect to the approval of the
transaction described herein. When completed, the information
statement will be mailed to the Company’s stockholders. You may
obtain copies of all documents filed by the Company with the SEC
regarding this transaction, free of charge, at the SEC’s website,
www.sec.gov or from the Company’s website at
https://investors.forterrabp.com/.
Forterra Contact Information:
Investor Relations:Charlie BrownExecutive Vice President and
Chief Financial Officer469-299-9113IR@forterrabp.com
Media Relations:Jed Repko, Ed Trissel or Joseph SalaJoele Frank,
Wilkinson Brimmer Katcher212-355-4449
Quikrete Contact Information:
Frank OwensChief Marketing OfficerQuikrete Holdings,
Inc.404-634-9100Frank.owens@quikrete.com
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