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Entering a Likely Final Frenzy, LBM's 2021 Dealmaking Totals Look Set to Top 2020

Updated: Dec 16, 2021


LBM operations acquired (blue dots), opened (black), or closed (red) YTD 2021. Not shown: One opening and one deal in Hawaii. Source: Webb Analytics

Past history and new inflation and tax concerns combine to suggest we'll see a lot more dots added by Dec. 31 to a 2021 LBM Deals Map that already is close to topping the numbers for all of 2020.


Through Dec. 15, a total of 119 transactions have caused at least 617 locations to change hands this year. That's way ahead of 2020's 73 deals covering 479 locations, but this year's total still falls a bit short when you add in the roughly 162 BMC yards involved in its end-of-2020 merger with Builders FirstSource.


Meanwhile, greenfield openings are up dramatically, with 106 so far this year vs. 69 in all 2021. The number of closures is down--12 this year against 37 in 2020--but that news often takes longer to become known, so this year's number likely will rise.


It's common for dealmakers to be signing documents as New Year's Eve looms, especially when construction supply companies are showing such good numbers, so this year we're likely to see the same flurry. But end-of-2021 activity also could be spurred by two concerns. One is the possibility that Congress will increase capital gains tax rates. The other is Federal Reserve action that will push up lending rates in 2022. Put it all together and you get the feeling that some sellers regard this as their opportunity to get maximum returns.


US LBM didn't buy the most yards in recent weeks, but what it acquired was choice: Barrons, a two-yard powerhouse in the Washington, DC, area; and Professional Builders Supply, a highly regarded, fast-growing dealer in the Carolinas. Meanwhile, another well-known dealer, Shepley Wood Products in Massachusetts, sold to Kodiak Building Partners.


In terms of dealer counts, the biggest acquirer recently was White Cap Supply, which bought Ram Tool Construction Supply's 44 yards, all east of the Mississippi. In second place was Central Network Retail Group, which purchased 23 Frattallone's Hardware stores spread across the Minneapolis-St. Paul market.


Elsewhere:


* Employee-owned, Pennsylvania-based Your Building Centers bought the three-unit Allensville Planing Mills stores.


* Drywall specialist GMS bought Kimco, which has stores in Tampa and Brooksville, FL. In addition, its Rocky Top Materials division expanded to Johnson City, TN.


* Beacon sold its solar operations to a foreign-based solar specialist called BayWa r.e. Beacon's news releases said it had four stand-alone solar facilities and shared solar operations with six other facilities. It wasn't clear at press time how many of those facilities, if any, would transfer to BayWa r.e.'s control.


* W.E. Aubuchon, the nation's biggest family-owned hardware chain, bought four hardware stores in New Hope, Doylestown, Richboro, and Blue Bell, PA.


* SRS Distribution's Heritage Landscape Supply Group continued its rapid growth. Since mid-November it has acquired SBI Materials, a two-unit operation in Northern California, and two New York State firms: AGC Irrigation Supplies and North Shore Sprinkler Supplies.


* Gillman Home Center opened a new outlet in Hartford City, while R.P. Lumber did the same in Poplar Bluff, MO.


* ABC Supply opened for business in Lufkin, TX. Meanwhile, ABC's L&W Supply division held openings in West Palm Beach, FL, and Bedford Heights, OH.


* 84 Lumber opened a store in Boise, ID, and closed its Kennedy, NY, location.


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