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Deals Pace Slows in 4Q; 2019 Is Unlikely to Match Last Year

Updated: Nov 20, 2019

Unless dealers and their M&A partners have more than 100 transactions baked and ready to announce by year end, 2019 looks certain to trail far behind last year's pace of deals, openings and closures, the latest Webb Analytics count finds.

As for today there have been 304 LBM establishments changing hands, starting fresh, or shutting down in 2019. That compares with the 383 locations involved at this point last year. By year end, 2018 saw 409 changes.

This year's first quarter suggested 2019 would be even busier than 2018, with 98 actions reported vs. just 62 in the first quarter of the previous year. But then the action slowed, with 75 new pins on the map in 2019's second quarter compared with 108 the year before, and 105 changes in the third quarter vs. the year-earlier 142. And so far in 2019's fourth quarter, only 26 locations have been involved. There were 71 in 4Q by this point last year.

Just three acquisitions have been announced since mid-October. In one, Higginbotham Bros. ventured outside Texas for the first time to acquire White's Ace Building Center of Shawnee and Seminole, OK. Another involved GMS, which bought Rigney Building Supplies of Kingston, Ontario, Canada. The third was at BMC, which acquired the two-unit Colorado Fasteners operation.

There were several greenfield openings: Sunrise Builders Supply in Arlington, TN; Ace Lumber & Hardware in Bradford, PA; US LBM's Universal Supply in Easton, MD; National Lumber in Kingston, MA; ABC Supply in Framingham, MA; Foundation Building Materials in Bakersfiled, CA; and ABC's L&W Supply in Glendale, AZ.

Meanwhile, 84 Lumber closed a store in Richmond, VA, and simultaneously opened a much larger location in the same market.

As usual, several unnamed lumberyards have put themselves up for sale. One, in Jackson, TN, asks for $1 million but doesn't list any financials aside from $300,000 worth of inventory and 5 acres of property. But it does say the deal includes a 2,400-square-foot house. Another, in Montana, has $170,000 in annual gross revenues and an asking price of $850,000. Then there's a lumberyard in Arkansas with $3 million in annual gross revenue, $300,000 in EBITDA, but no asking price.

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