Blackstone's New Platform Makes 1st Acquisition

The Blackstone Group, Silverhawk Capital Partners and other backers have committed up to $780 million to a new platform named Summit Materials. The company will acquire building materials businesses and is being led by Tom Hill, the former CEO of Oldcastle. Summit Materials also announced that it has acquired Hamm, its first acquisition. Hamm provides concrete, aggregates, landfill and asphalt products for construction companies in the Midwest.

The construction materials industry has not seen a large quantity of private equity activity but it has seen a bit, with 27 materials companies being acquired by private equity since 2000. The largest deal is Kelso & Co's $600 million acquisition of Custom Building Products in 2005. One company that has experienced a good level of PE investment is US Silica. The company has had three private equity backers, Harvest Partners, Harbert Management and Golden Gate Capital, in the last three years. Evidence of the recent building boom can be seen in the data with over half of the construction materials companies being acquired from the beginning of 2006 to November 2008.