S&P boosts Summit Materials

S&P said it raised its ratings for Summit Materials LLC and senior unsecured debt to BB+ from BB and affirmed the BBB- rating on its secured debt. The agency also removed the ratings from positive watch where it was placed on Sept. 7.

“The upgrade reflects enhanced geographic diversification, size, and scale because of the acquisition of Argos USA. The combination expands Summit's materials led portfolio to 78% from 70% because Argos USA's cement segment which complements Summit's nationwide distribution network.

“We also expect improved scale, with revenue of about $4.1 billion and EBITDA of about $900 million pro forma for the transaction. These attributes are somewhat offset by risks associated with an acquisition of this size, including integration and execution risks as Summit works to realize its expected synergies,” S&P said in a press release.

The outlook is stable.

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