Denver-based construction materials supplier, Summit Materials, has announced a restructured agreement with certain affiliates of investment firm Blackstone, resulting in a reduction of payments.
Summit’s subsidiary has acquired all the rights and interests of each Blackstone affiliate under their previous tax receivable agreement. As a result of this acquisition, Summit has eliminated an estimated $256 million in tax receivable agreement payments that were originally payable to Blackstone between 2024 and 2039. In exchange for this reduction, Summit will provide a cash consideration of $115 million.
This new agreement is a strategic move by Summit to simplify their financial obligations and minimize future complexities. “We are pleased to have reached this favorable agreement, as it sets us on a course to significantly reduce our financial complexity,” stated Summit’s Chief Executive, Anne Noonan.
While there is still a remaining gross obligation of approximately $72 million under the agreement, Summit intends to explore potential transactions to settle with the other parties involved in the tax-receivable agreement. The company aims to negotiate these transactions on substantially similar terms to further streamline their financial commitments.
Summit Materials’ restructuring of its tax receivable agreement with Blackstone is a testament to its proactive approach in managing its financial obligations and seeking favorable terms that align with the company’s long-term goals.
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