Wall Street embraces Martin Marietta unit

February 18, 1994|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Martin Marietta Materials Inc.'s initial public offering was a hit on Wall Street yesterday, selling out and ending the day up 7 percent in price.

The producer of construction aggregates -- principally crushed stones used in highway construction -- had offered 7.65 million shares at $23 each through an underwriting team headed by Morgan Stanley & Co. The company had originally expected to sell its shares at $21, according to reports filed with the Securities and Exchange Commission.

The public thought they were worth more. Within the first hour the shares were trading at $25.875 on the New York Stock Exchange and closed the day at $24.625.

More than half the shares were traded during the day as the public cashed in on the stock's rise in price.

"It was an extremely hot issue," said Rich Scarbath, a broker with the Baltimore office of Wheat First Butcher & Singer. He said his office could have sold 60,000 to 70,000 shares, but it received only 2,000 shares from the syndicate handling the underwriting.

Martin Marietta Materials, based in Raleigh, N.C., is a subsidiary of Bethesda-based Martin Marietta Corp. The parent company decided in December to spin off about 18 percent of the subsidiary to reduce its debt and generate new revenue for possible acquisitions.

Martin Marietta still holds the rest of the stock.

Mr. Scarbath said there was keen interest in the stock on the part of workers at Martin Marietta's aerospace plant in Middle River.

"They had a lot of respect for this company -- they think it is well run."

Martin Marietta Materials is the nation's third-largest producer of crushed stone for use in highway construction and other infrastructure construction. It posted an operating profit of $77.3 million last year and net income of $30.4 million.

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