KAT Construction Plans Public Sale of Stone Fabricator
The Dallas stone fabricator is registering shares to fund a roll-up of regional countertop operators.
KAT Construction Services, Inc. is registering an offering of Class A common stock to raise capital for a planned roll-up of smaller regional stone fabricators, with a secondary use for technology, equipment, geographic expansion and general corporate purposes. The company intends to apply to list the shares on the NYSE American and the NYSE Texas under the symbol KATX.
The Dallas-based company fabricates and installs natural and engineered stone for countertops, surfaces and wall applications across commercial, multi-family and residential construction in the Dallas-Fort Worth market. It operates three divisions: Multi-Family, Commercial and Residential. Residential work runs through a Home Depot retail program covering 54 stores in assigned Dallas-Fort Worth markets, a builder and business-to-business channel, and direct-to-consumer sales. Commercial and multi-family work is awarded through competitive bids, negotiated contracts and developer agreements.
The company said it uses commercially available 3D laser templating, CNC machining, bridge saws, edge polishers and workflow software, and that it does not own proprietary software, fabrication technology or patented processes. It said the U.S. stone fabrication and countertop market is highly fragmented, with thousands of small regional operators, and that it intends to expand into markets including Houston, San Antonio, Arizona, Georgia, Florida and Tennessee, subject to local conditions, labor, facilities and expected returns.
The Home Depot relationship is a core order channel. The company said it has served Home Depot for about 30 years and that the current master service provider agreement, dated October 21, 2024, covers templating, fabrication and installation at the 54 stores it supports. The agreement had an initial one-year term and automatically renews for successive one-year terms unless the company provides at least 180 days’ prior written notice of non-renewal. Home Depot may terminate the agreement for convenience upon written notice. The company said the arrangement is non-exclusive and does not require a minimum volume of business.
The company said it has not identified specific acquisition targets that are probable of being acquired and has no letters of intent or definitive agreements in place. It said acquisitions would be financed with net proceeds from the offering, internally generated cash flow and, where appropriate, third-party debt or seller financing, and that the pace of geographic expansion would be calibrated to those proceeds, cash flow and acquisition opportunities.