October's LBM Deal of the Month: A New Power?
Few M&A announcements include a statement from a relatively new company that it aims to become a national power. But that’s what the investment firms Angeles Equity Partners and Clearlake Capital Group did when they unveiled American Construction Source (ACS) and touted a pair of deals in rapid succession.
The first was by far the bigger: Sept. 26’s news release saying ACS bought Meek’s Lumber, the 22nd biggest company on the ProSales 100, and that former Stock Building Supply executive Jim Drexinger was the new CEO. Then about a week later, ACS bought two Colorado lumberyards, Breckenridge Building Supply and Edwards Building Supply.
The deals are part of a plan “to create a leading national building products distributor with the resources, leverage, and focus to deliver the LBM industry’s best customer experience,” Angeles and Clearlake’s Sept. 26 press release said. The same press release also spoke of creating a “national footprint."
The deal automatically puts ACS among construction supply’s elite: Meek’s generated $347.6 million in sales last year from 13 locations in Northern California and 37 more in Arkansas and Missouri.
It also marks at least one big change in how the new Meek’s is set up financially. On Oct. 3, the commercial brokerage firm HFF announced that it brokered a sale-leaseback of 41 distribution centers and commercial properties. No terms were disclosed.
As with US LBM, there’s a lot of Stock Building Supply in ACS. Drexinger spent nearly nine years with the company, rising to rising president and general manager before leaving in 2014 to become an adviser to Angeles Capital. And Tim Meyer and Jordan Katz, founding partners at Angeles, previously led the industrial team at The Gores Group, the private equity fund that took over Stock in May 2009 as it went through Chapter 11 bankruptcy reorganization. Gores eventually remade Stock into a publicly traded company in 2013. Stock merged into BMC in 2016.