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TAL Holdings' M&A-Fueled Growth in Pacific Northwest Signals Rise of New Regional Powers

It's common to get fixated on big dealers making big deals in construction supply's M&A space, but they're definitely not the only operations doing acquisitions. Case in point: TAL Holdings LLC.

Starting with the three melodiously named Tum-A-Lum Lumber yards serving the Columbia River Gorge, what is now TAL Holdings has grown to nearly two dozen locations plus a corporate headquarters just north of Portland, OR. Nine of those stores came on board in just the past three months: Bayview Building Materials in January, the three-unit Midway Building Supply operation in February and then, earlier this month, the five-store Orofino Builders Supply operation (soon to be renamed Best Built Builders Supply).

This flurry of purchasing compares with the two deals for five locations that TAL did in 2021, its one purchase of two yards in 2020, and the single yards it acquired in 2019 and 2017. And it comes amid strong interest in the Northwest by bigger suitors: Buyers in Washington State since 2020 have included US LBM and Kodiak Building Partners, plus regional power Parr Lumber.

TAL isn't the only example of smaller-network growth. Of these, probably the best known is Nation's Best Holdings, a Texas-based company backed by Do it Best. Since the start of 2021, Nation's Best has done 10 deal that brought it 12 yards, mainly in the Southwest and Great Lakes regions. Meanwhile, Pleasant River Lumber has made five acquisitions that brought it eight lumberyards, all in Maine. In Florida, both Gleckler & Sons and Fulcrum Building Group are stringing together assets, and Building Industry Partners aims to grow in the Southeast. None of these are top 10 operations in Webb Analytics' Construction Supply 150, but they do represent alternative buyers for dealers who don't want to sell to the biggest companies.

All openings, closures, and acquisitions between 1/1/21 and 3/21/22, sorted by acquiring company. (Source: Webb Analytics)

Speaking of the biggest dealers, all have been relatively quiet on the M&A front since Builders FirstSource bought New England giant National Lumber in January. Single-store deals have predominated since mid-February, with Lezzer Lumber buying Green Hills Lumber of Mohnton, PA; Talbert Building Supply acquiring Plyler Supply of Danville, VA; and Nation's Best picking up Weiss Do it Best Lumber of Perryville, AR.

Some of the more interesting action lately has involved greenfield openings. So far this year, a total of 42 such openings have taken place or have been announced. That compares with 72 locations that have been acquired. That makes this year's openings-to-deals ratio 58%, far exceeding what we saw in 2021, when there were 23% as many openings as deals. The same is true for the openings-to-deals ratios in 2020 (11%), 2019 (45%), and 2018 (24%).

Among the openings this year are an R.P. Lumber store in Nevada, MO (its 16th in the Show-Me State); Beacon Building Products in Pico Rivera, CA, and Little Chute, WA; E&H Hardware Group in Wooster, OH; Contract Lumber in Blackstone, VA; Professional Builders Supply in Shallotte, NC; and Floor & Decor in Houston and Live Oak, TX.

Scheduled to open this spring and summer are a McCoy's Building Supply store in Spicewood, TX; an Eldredge Lumber & Hardware yard in Sanford, ME (first planned two years ago and then delayed because of COVID); Fulcrum Building Group's new operation in Parker, FL; and a BFS facility in Carbondale, CO.

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