Summit Materials plans $275 million notes as part of financing effort

By Paul Deckelman

New York, June 18 – Summit Materials LLC announced plans Thursday for a $275 million offering of senior notes.

The Denver-based construction materials company said in an 8-K filing with the Securities and Exchange Commission that the notes would be part of the anticipated financing for Summit’s previously announced acquisition of Lafarge North America Inc.’s Davenport, Iowa, cement plant and seven cement distribution terminals. Summit will pay Lafarge $450 million plus a Bettendorf, Iowa, cement distribution terminal currently operated by Summit’s Continental Cement Co. LLC subsidiary.

Summit will pay $370 million of the cash portion of the deal to Lafarge at the transaction’s closing, which is expected to take place next month, with the remaining $80 million to be paid no later than Dec. 31.

Information on the timing of the bond deal, its structure, how it will be marketed to potential investors and the investment banks involved was not immediately available Thursday.

Besides the note offering, the financing for the Lafarge deal will also include a new $650 million term loan B due 2022. Proceeds from the bank loan and the bond deal will be used to pay the $370 million initial installment on the Lafarge deal, to refinance Summit’s existing term loan B due 2019 and to refinance a portion of the company’s existing senior notes.

Summit plans to launch the bank debt portion of its financing with a lender call on Friday.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Citigroup Global Markets Inc., Barclays and RBC Capital Markets are the arrangers on the bank deal. Blackstone is a co-manager.

Sara Rosenberg contributed to this report

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