After the IPO: Foundation Building Materials Inc.
Foundation Building Materials is a company that offers its clients building materials depending on their needs regarding quantity and style. The company was started on March 1st, 2011 by business partners Ruben Mendoza, John Gorey and Tom Fischbeck. The company began in Tustin, California. Currently. Mr. Mendoza is the company’s President and CEO. He has more than 25 years of experience within the construction industry and was previously the CEO of AMS, a ceiling systems, and wallboards distributor.
Foundation Building Materials has 205 locations in 36 states across North America. It is the second-largest distributor of wallboard as well as suspended ceiling systems in Canada and the US. It is also one of the largest distributors and manufacturers of industrial and commercial insulation across the United States.
The company filed for an IPO in early January and set the terms for its release on January 31st this year. On February 9th, the company had its Initial Public Offering pricing its stock at $14 per share. This was below the expected range of $17 – $19. The company’s choice in pricing followed financial advice from Gibson Dunn. The firm sold 12.8 million shares in its release. This resulted in the raising of revenue totaling to $179 million.
Joint book-running managers for the offering included Deutsche Bank Securities, Barclays, RBC Capital Markets and CitiGroup while Baird took on the role of lead manager. The list of co-managers for the company’s release included Raymond James, Stephens, SunTrust Robinson Humphrey and William Blair. Underwriters for the offering had the chance to buy an additional 1.92 million shares as an overallotment option.
The company appeared on trading floors for the first time on February 10th under the ticker FBM. It rose by $1.60 closing the day at $15.60. This resulted in an 11 percent increase in share value. This was a good sign for coming trading days.
The company reports that it used the revenue generated from its offering to pay off its indebtedness. It also planned to use these proceeds for general and corporate purposes. The company had indicated, in its S-11 form that it would not receive any proceeds from the sale of shares by the selling stockholder if the underwriters exercise their overallotment option.
Foundation Building Materials has a stable revenue totaling to an estimated $1.1 billion for the past twelve months. The company had a net income of -$56.7 million for the twelve months preceding its offering. It is expected to make a profit this financial year as a result of its release and consequently, further expansion.
The firm reports having 30,000 customers. Further, it increased its wallboard market share from 2.6 percent to 7.6 percent in the past four years. It also has over 3,400 employees under its management. In October 2015, the company was purchased by private equity firm Lone Star.
The trend for this company’s stock is rather inconsistent. Share value has reached lows of $15.20 in the past month. However, the shares also reached a peak value of $17.02 at the beginning of March. Currently, the company has a market capital of an estimated $698 million.