Forterra (FRTA) to Be Acquired by Quikrete for $24/share in $2.74 Billion Deal

Forterra, Inc. (“Forterra” or “the Company”) (NASDAQ: FRTA), a leading manufacturer of water and drainage infrastructure pipe and products in the United States and Eastern Canada, today announced that it has entered into a definitive agreement under which Quikrete Holdings, Inc. (“Quikrete”) will acquire all outstanding shares of Forterra for $24.00 per share in an all cash transaction valued at approximately $2.74 billion, including outstanding debt.

The transaction, which was unanimously approved by the Forterra Board of Directors, represents a premium of approximately 38.5% to Forterra’s 90-day volume-weighted average share price on February 19, 2021. Upon completion of the transaction, Forterra will become a privately held company.

“Forterra and Quikrete are an ideal strategic fit, and this combination is a natural next step for our company, enabling us to better serve our customers across the company on their concrete projects from start to finish. We are excited to grow our capabilities in the potable water distribution market through Forterra’s well-respected U.S. Pipe business,” said Will Magill, CEO of Quikrete Holdings, Inc. “We are excited to welcome the Forterra team and bring our two great companies together.”

“We are pleased to announce this transaction with Quikrete, which delivers a compelling cash premium to our shareholders,” said Forterra CEO Karl Watson, Jr. “We admire Quikrete’s impressive 80 year history and commitment to delivering superior service and products to customers. Over the past two years, we have made significant progress executing on our five improvement pillars of safety, plant-level operational discipline, enhanced commercial capabilities, working capital efficiency, and general and administrative expense effectiveness. Today’s announcement advances that progress and is a testament to our team members’ hard work and commitment to Forterra. We look forward to working with Quikrete to build on our positive momentum and achieve even greater success together.”

“Following a thorough review of the opportunities available to Forterra to deliver the greatest value to shareholders, the Forterra Board of Directors unanimously determined that entering into this agreement with Quikrete and becoming a private company again is the best path forward to maximize value,” said Chris Meyer, Chairman of the Forterra Board. “The transaction with Quikrete represents an exciting new chapter for Forterra – one that could not have been achieved without the leadership from the entire management team and the dedication of all Forterra team members.”

In light of this announcement, Forterra will issue earnings as planned after the close of business February 24, 2021, but will not be hosting its previously announced fourth quarter and full year 2020 earnings conference call on February 25, 2021.

Approvals

An affiliate of Lone Star Funds (“Lone Star”), a global private equity firm, acquired Forterra in 2015 and has maintained a majority ownership since the Company’s initial public offering in 2016. Following execution of the merger agreement, Lone Star, which owns approximately 53% of the Company’s outstanding shares of common stock, approved the transaction by written consent. No further action by Forterra’s shareholders is needed or will be solicited in connection with the merger.

The transaction is expected to close in the fourth quarter of 2021, subject to customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Advisors

Citi is serving as financial advisor to Forterra, and Gibson, Dunn & Crutcher LLP is serving as legal counsel for the transaction, with Kirkland & Ellis LLP serving as regulatory counsel. Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Quikrete and Troutman Pepper Hamilton Sanders LLP is serving as legal counsel for the transaction, with King & Spalding LLP serving as regulatory counsel. Wells Fargo has provided a debt financing commitment for an incremental loan to finance the transaction.

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