LBM Merger & Acquisition Activity Remains Strong
Originally published by: Building Industry Advisors — November 14, 2019
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Editor's Note: SBC Magazine recently explored the possible implications of recent merger & aqusition (M&A) activity by BMC and UFPI. This article provides a quick list of the most notable M&A activity that has occurred throughout the lumber and building material dealer (LBM) industry. What is motivating these companies to further diversify? The answer likely lies in the advantages of integrating farther up and down the construction supply chain and consolidate customer bases. As builders and GCs reevaluate their supply chains to address scheduling inefficiencies, jobsite labor constraints, volatile material costs, jobsite waste and better cycle time efficiency, all CMs have an opportunity and a motivation to review their current business model and offer solutions tied to their customer’s needs.
We count just under 300 construction supply facilities that were involved in acquisitions, greenfield openings, or closures so far this year. That's slightly ahead of last year's torrid pace. Of those locations, 174 were involved in M&A deals, 92 opened their doors for the first time, and 30 facilities closed.
More than 75 ownership changes have taken place just since July 4. The biggest single transaction saw SRS Distribution acquire 21-branch Travis Roofing Supply. SRS also bought the six-unit Roofers Supply stores of Utah; Slover Roofing Supply, a two-unit operation in Texas, and Schultz Roofing of St. Joseph, MI.
Here are the other most notable deals since mid-summer:
SRS' Heritage Landscaping Supply Group bought Normac, which has eight facilities in California.
A new investor came on the scene when Fulcrum Building Group of Southern California came to life and purchased a pair of dealers on the Gulf Coast: Navarre (FL) Lumber and South Bay Lumber of Santa Rosa Beach, FL. Fulcrum says it's looking to increase its holdings.
BMC expanded in the Sacramento area by acquiring Heritage One Door & Hardware of North Highlands, CA. Back east, Timberline Enterprises bought Braintree (MA) Lumber while a millwork specialist. Randall Brothers, took in Marietta, GA-based PMC Building Materials.
Two divisions of Building Industry Partners did deals. Homewood Holdings acquired Total Trim Construction of Auburn, CA, and U.S. Fence Solutions bought Western Access Controls of Northglenn, CO.
We saw two instances of co-location: L&W Supply and its parent, ABC Supply, began operating out of the same address in Boise, ID, while Universal Supply opened a new facility in Kimberton, PA, in space that had been fully occupied by fellow US LBM company Shelly's.
ABC Supply also opened stores in Stockton, CA; Auburn, NY; Sharonville, OH; and La Mirada, CA. L&W Supply did the same in Modesto, CA; Green Bay, WI; and Fishersville, VA. Meanwhile, gypsum specialist GMS said its Cowtown Materials unit set up shop in Wichita Falls, TX; while its New England Gypsum branch entered Manchester, NH. GMS also went north to Canada and bought an Ontario firm, Rigney Building Supplies.
After announcing four greenfield openings on July 1, SRS revealed more between Aug. 5 and Sept. 20. Those new stores are in Colorado Springs, CO; Indianapolis; Dayton, OH; Fayetteville, NC; Saxonburg, PA; and Sun Valley, CA.
Foundation Building Materials expanded in Texas by opening facilities in Corpus Christi, New Braunfels, and Lewisville.
Other greenfield openings by bigger dealers included: McCoy's Building Supply in Bay City, TX; Curtis Lumber in Richmondville and Sidney, NY; Kuiken Brothers in Newark, NJ; and Arrowhead Building Supply in St. Peters, MO. Meanwhile, Eldredge Lumber said it plans to open a store in Sanford, ME, by year-end.
There were several smaller dealers that launched: Minardi Lumber, Hermatnown, MN; Bazooka Lumber and Livestock, Thermopolis, WY; JR's Building Supplies, Texarkana, TX; LumBros. Building Solutions in Detroit Lakes, MN; and Local Lumber and Supply, Williamson, WV.
Three stores have posted notices saying they're up for sale. One is Walker Lumber Co. and Do it Best Hardware in Minong, WI, (sale notice) another other is Hackensack (MN) Lumber and Hardware (sale notice), and the third is an unidentified store in Hialeah, FL (sale notice).