Shaky Foundations at Forterra: Lone Star Funds’ Foray into the Building Materials Industry
Texas-based Lone Star Funds has moved heavily into the United States residential sector, and is planning an IPO of Forterra, its building materials manufacturer. But with its portfolio company facing high debt and ongoing control by Lone Star Funds, will outside investors benefit?
A new report by UNITE HERE investigates Lone Star Funds’ ownership of Forterra:
- Forterra’s private equity legacy has increased its long-term debt relative to its peers.
- Forterra’s long-term debt to EBITDA ratio has doubled since Lone Star purchased the company.
- Lone Star will own 71% of Forterra stock following the IPO and control seven of the eleven board seats. Outside investors will not have a significant say in the direction of Forterra.