Shares of Dallas-based Builders
FirstSource spiked to a new 52-week high in today’s morning trade following
yesterday’s announcement that it will acquire privately held lumber supplier
ProBuild for $1.63 billion in cash.
BLDR manufactures
professional-grade building materials and products for U.S. homebuilders and
remodelers. Through its 56 distribution centers and 56 manufacturing facilities
across nine southeastern states, the building materials company produces a
variety of products including decking, stairs, cabinets, shelving, siding and
insulation, windows, interior and exterior doors, mirrors, lumber and more.
Based on 2013 sales figures,
ProSales Magazine ranks BLDR as the nation’s third-largest building products
provider. The company employs an aggressive acquisition strategy, and since its
formation in the late 1990s has acquired more than 26 companies that contribute
to the company’s growth.
Despite weaker-than-expected new
home construction in 2014, BLDR increased its topline and expanded its product
offering and customer base.
The acquisitions drove Q4 2014
revenues 7.5% higher to $397 million while fiscal full-year sales increased
7.7% to $1.6 billion. Excluding the impact of these acquisitions, Q4 revenues
increased 3.0% while full-year sales increased 5.8%. Full-year sales volume
grew 7.9% before a 2.1% negative impact of commodity price deflation on total
sales.
In the second half of 2014 BLDR
completed five acquisitions and opened a new distribution facility in Houston.
The upcoming acquisition of ProBuild, a company with sales of $4.5 billion in
2014, is expected to close in the second half of 2015 and be immediately
accretive to BLDR’s earnings.
BLDR CEO Floyd Sherman explained
how the company plans to continue this momentum moving forward.
“Our outlook is for a steady
recovery in the housing market due to factors such as continued job growth,
favorable mortgage rates and lending guidelines that appear to be easing. As
the economy expands and the housing market moves back towards a stronger level
of activity, our focus will remain on profitably growing our revenues while
continuing to look for ways to gain share, either organically or through
acquisitions, and improve our operating margins,” Sherman stated in BLDR’s
Q4/FY14 earnings release.
For more information, visit
www.bldr.com
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