Summit Materials, Inc. (NYSE:SUM) revealed on Tuesday that its subsidiaries Summit Materials Finance Corporation and Summit Materials LLC have come up with a final agreement on its offering of $250 million net principal amount of 8.500% senior notes, which are due in 2022. The completion is expected to happen on March 8.

Summit Materials will use the proceeds to acquire Boxley Materials Company, pay the expenses incurred from acquisitions and the senior notes offering, and replace the money used to acquire American Materials Company (AMC).

Legal Requirements

The offered senior notes have not yet been registered under the Securities Act of 1933. Unless Summit Materials completes the registration process, the said notes may not be sold in the US unless in pursuant to an exemption or a transaction not subject to the requirements imposed by the Securities Act of 1933 and other applicable jurisdictions.

Furthermore, the initial purchasers will be entitled to offer the notes only to those who are reasonably qualified institutional buyers in accordance to Rule 144A under the Securities Act of 1933 and to non-US citizens under transactions outside the borders of US in accordance to Regulation S under the Securities Act of 1933.

Boxley Materials Acquisition

Summit Materials has also revealed on Tuesday that it has come up with a definitive agreement to fulfil its acquisition of Boxley Materials, a Virginia-based construction materials company. The acquisition is expected to be completed in March.

Summit Materials hopes to strengthen its growing business with these acquisitions, particularly in Carolinas and Virginia.

Tom Hill, Summit CEO, believes that Boxley Materials and AMC complements Summit Materials’ strategy of expanding its presence throughout the country.

The integrated venture includes 11 aggregates locations and 500,000 tons of reserves, which are expected to drive annual sales volume up to five million tons. The acquisitions cost about $250 million.

Latest Quarterly Results

The company released its fourth quarter report on February 11. For the period, Summit Materials had a net revenue of $359.50 million, gaining 22.30% from the same period last year. The high volumes and cement and aggregates prices primarily drove the company’s growth.