UK-based brick and tile maker Ibstock has announced plans to raise UK£ 100 million (US$ 155 million) through an initial public offering (IPO) of its shares on the London Stock Exchange. It plans to use the proceeds to pay-down debt.
The shares are being sold by its private equity owner, Bain Capital, along with directors of the company. Ibstock said it was aiming to have about 25% of its share capital as regularly traded free float. Ibstock’s admission onto the stock market is expected in October.
The company achieved revenues of UK£ 373 million (US$ 580 million) last year, with earnings before interest, tax, depreciation and amortisation (EBITDA) of UK£ 65 million (US$ 100 million). The company said that following the IPO, its dividend policy would see 40% - 50% of its post-tax profit paid out to shareholders.
Ibstock says it has about a 40% share in the UK market for clay bricks, with 19 manufacturing plants around the country and a capacity of 780 million bricks per year. It has reserves of more than 150 million tonnes of clay across 23 quarries in the UK. The company also manufactures and sells bricks in the US under the Glen-Grey brand.
Ibstock CEO Wayne Sheppard said, "Our markets are benefiting from a powerful alignment of growth factors. In the UK, a long-term undersupply of new homes compounded by strong population growth and rates of household formation has created substantial unfulfilled demand for new housing. This demand is now being supported by wide-ranging Government initiatives to help increase new home supply. With UK brick demand now exceeding current manufacturing capacity, a significant opportunity has been created for a UK manufacturer to expand capacity.”