By Gillian Tan And Telis Demos 

The private-equity owner of Gypsum Management and Supply Inc. has tapped banks for an initial public offering of the specialty building materials distributor, just over a year after it bought the company, according to people familiar with the matter.

The potential IPO reflects a desire by private-equity firms to take advantage of the robust stock market and investor enthusiasm for new offerings. On Thursday, newly minted shares of three companies, Etsy Inc., Virtu Financial Inc. and Party City Holdco Inc., rose on their trading debut, Etsy's significantly.

Buyout firms, which take over companies and try to sell them later at a profit, typically hold companies for about five years. But AEA Investors LP, majority owner of Gypsum Management and Supply, is moving much more quickly. AEA agreed to buy a majority stake the Tucker, Ga.-based company, known as GMS, in February of last year. AEA owns 65% of the company while management owns the remaining 35%, according to Moody's Investors Service.

AEA is working with Credit Suisse Group AG and Barclays PLC on the IPO of the distributor of drywall and other products, while RBC Capital Markets and Wells Fargo & Co. are also involved, the people said. The IPO, which could occur later this year, could value Gypsum at about $1 billion, some of the people said.

GMS, which dates back to 1971, has been making acquisitions at a fast clip under the ownership of AEA. Last month, it said it had acquired San Diego-based J&B Materials Inc. and its Hawaiian affiliate Pono Building Materials LLC. Also in March, it agreed to buy Ohio Valley Building Products.

Earlier, the company entered Iowa and expanded in Nebraska and West Texas with other acquisitions. Its revenue exceeds $1 billion, one of the people said.

An IPO of the company comes as investors look toward continued recovery in the housing market. Construction suppliers had suffered last year, and IPOs of such companies dried up for a time. But the shares of many companies have rallied this year. Continental Building Products Inc., which manufactures gypsum, is now up 60% since its February 2014 IPO, after falling below its issue price last year. Distributors of materials, like GMS, are mixed. HD Supply Inc. has gained 82% since its June 2013 debut. Wesco International Inc. is still off 23% from its high point early last year, though it has rallied so far in 2015.

Write to Gillian Tan at gillian.tan@wsj.com and Telis Demos at telis.demos@wsj.com

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