DENVER, Aug. 22,
2023 /PRNewswire/ -- Summit Materials, Inc.
(NYSE: SUM, the "Company"), a leading vertically integrated
construction materials company, announces that it reached an
agreement with certain affiliates of Blackstone Inc. (the
"Blackstone TRA Parties") that resulted in its indirect subsidiary,
Summit Materials, LLC (together with the Company, "Summit")
acquiring all of the rights and interest of each of the Blackstone
TRA Parties under the Tax Receivable Agreement, dated as of
March 11, 2015 (as amended, the
"TRA"), by and among the Company, the Blackstone TRA Parties and
certain other parties. In exchange for cash consideration of
$115 million in the aggregate, Summit
has eliminated an estimated $256
million in TRA payments payable to Blackstone between 2024
and 2039. Under the TRA, the Company is obligated to pay
pre-IPO owners 85% of cash savings, if any, in U.S. federal, state
and local income tax that we actually realize, as a result of our
tax attributes. After this agreement, Summit will realize 100% of
any cash savings realized as a result of our tax attributes related
to the interests acquired from the Blackstone TRA Parties. Summit
funded the agreement with cash on hand believing this is an
efficient use of cash and does not inhibit Summit's ability to fund
organic or inorganic growth opportunities.
"This agreement represents a major milestone for Summit
Materials, highlighting not only our commitment to strengthen our
financial position, but also sets us on course to significantly
reduce complexity and eliminate future obligations at a favorable
price to our Company," commented Anne
Noonan, Summit Materials President and CEO.
"The Tax Receivable Agreement has served as a valuable tool,
enabling our Company to monetize tax benefits effectively. But by
executing this agreement, we take an important step towards
streamlining our corporate structure, proactively mitigate future
obligations at an advantageous cost, and now get to fully realize
all the tax benefits moving forward," added Scott Anderson, Executive Vice President and CFO
of Summit Materials.
There remains a gross obligation of approximately $72 million under the Tax Receivable Agreement.
Summit intends to explore possible transactions for paying out the
other parties to the TRA on substantially similar terms.
About Summit Materials, Inc.
Summit Materials is a leading vertically integrated
materials-based company that supplies aggregates, cement, ready-mix
concrete and asphalt in the United
States and British Columbia,
Canada. Summit is a geographically diverse, materials-based
business of scale that offers customers a single-source provider of
construction materials and related downstream products in the
public infrastructure, residential and non-residential end markets.
Summit has a strong track record of successful acquisitions since
its founding and continues to pursue growth opportunities in new
and existing markets. For more information about Summit Materials,
please visit www.summit-materials.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" within
the meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include all statements
that do not relate solely to historical or current facts, and you
can identify forward-looking statements because they contain words
such as "believes," "expects," "may," "will," "should," "seeks,"
"intends," "trends," "plans," "estimates," "projects" or
"anticipates" or similar expressions that concern our strategy,
plans, expectations or intentions. All statements made relating to
the expectations for our anticipated benefits from recent
acquisitions, the macroeconomic outlook for our markets, potential
acquisition activity, our estimated and projected earnings,
margins, costs, expenditures, cash flows, sales volumes and
financial results are forward-looking statements. These
forward-looking statements are subject to risks, uncertainties and
other factors that may cause our actual results, performance or
achievements to be materially different from future results,
performance or achievements expressed or implied by such
forward-looking statements. We derive many of our forward-looking
statements from our operating budgets and forecasts, which are
based upon many detailed assumptions. While we believe that our
assumptions are reasonable, it is very difficult to predict the
effect of known factors, and, of course, it is impossible to
anticipate all factors that could affect our actual results.
In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by us or any
other person that the results or conditions described in such
statements or our objectives and plans will be realized. Important
factors could affect our results and could cause results to differ
materially from those expressed in our forward-looking statements,
including but not limited to the factors discussed in the section
entitled "Risk Factors" in Summit's Annual Report on Form 10-K for
the fiscal year ended December 31,
2022. Such factors may be updated from time to time in our
periodic filings with the SEC, which are accessible on the SEC's
website at www.sec.gov. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as required by
law.
Contact Information
Andy Larkin
VP, Investor Relations
Summit Materials, Inc.
andy.larkin@summit-materials.com
720-618-6013
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SOURCE Summit Materials, Inc.