Summit Materials plans $385 million term loan for Davenport assets buy

By Sara Rosenberg

New York, April 17 – Summit Materials LLC received a commitment for a $385 million senior secured incremental term loan due 2019 to help fund its acquisition of a 1.2 million short ton capacity Davenport, Iowa, cement plant and seven cement distribution terminals from Lafarge North America, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and Goldman Sachs Bank USA are the lead banks on the deal.

The purchase price for the assets is $450 million, with $370 million due at closing, which is expected in July, and $80 million due no later than Dec. 31, 2015.

The payment at closing will be financed with the new term loan. For the remaining amount, the company received a commitment from Blackstone Capital Partners V LP for up to $90 million in equity. This equity commitment will be used if a public offering of class A common stock of Summit Materials Inc. can’t be completed in time, the filing said.

Summit’s estimated 2015 leverage ratio is not expected to exceed 4.75 times.

Closing on the acquisition is conditioned on regulatory approval and the completion of the Lafarge-Holcim global merger.

Summit is a Denver-based construction materials company.

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