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Two 24-Branch Buys Top Construction Supply's Latest M&A Action. Lumberyards Stick to Small Deals

LBM acquisitions (blue pins), greenfield openings (green), and closures (red) YTD 2022. Source: Webb Analytics

Two big deals show up on construction supply's M&A scoreboard this month: ABC Supply's acquisition of 24 U.S.-based locations from the Canadian siding specialist Kaycan, and the purchase by SRS Distribution's Heritage Landscape Supply Group of Imperial Sprinkler Supply, a 24-branch business scattered across California.

In contrast, deals involving lumber outlets have been sparse. The most notable was when Kodiak Building Partners took over the Memphis area's Sunrise Builders Supply, with units in Arlington, TN, and Horn Lake, MS.

All the other deals involved one yard each:

* Big C Lumber bought Delton (MI) Pole Building Supply;

* R.P. Lumber took over Kieffer Lumber of Mount Carmel, IL;

* The Equity Farm & Home Store acquired the Do-it Home Center of Altamont, IL; and

* Medford Cooperative bought Tomahawk (WI) Ace Hardware.

So far this year, there have been 107 deals involving 55 buyers who acquired a total of 320 locations. The number of deals is starting to trail the number we saw by this time last year (119) as well as in terms of buyers (60 by this point in 2021). But the big difference is in the number of locations acquired: 444 by mid-October last year, roughly one-third more than this year.

In contrast, the 150 greenfield location openings this year top the 115 reported by this time last year. Closures also have been much more noticeable--33 this year, 15 in 2021.

The ABC Supply-Kaycan shows ABC's continued expansion beyond roofing to encompass the outer shell of a home. ABC Supply said the Kaycan stores would convert to the ABC Supply name and would sell Kaycan's siding products as well as complementary materials.

ABC was active on the greenfield front, too. In the past four weeks it has opened stores in Haslet, TX; Danvers, MA; Gibbon, NE; Cleveland; and Pottstown, PA. And on the L&W Supply side of ABC's operations, that division acquired Dana Wallboard Supply of Tyngsborough, MA.

As for Heritage, its acquisition of Imperial Sprinkler is only its second this year; the first saw it buy the four-unit, Ohio-based Green Velvet Sod Farms. Heritage now has 178 branches.

In other developments since mid-September:

* SiteOne Landscape Supply purchased Madison (WI) Block & Stone.

* Gillman Home Center opened a branch in Muncie, IN.

* TW Perry, a division of Builders FirstSource, opened a door and window showroom in Annapolis, MD.

* Tri State Building Supply came to life in Dubuque, IA, while Curt's Ace Hardware planned by October's end to open stores in Gray and Piney Flats, TN.

* Valu Home Center closed locations in Batavia, Fredonia, and Lakewood, NY. Other closures were at Leonard Hardware, Sebring, OH; Lewter Hardware, Huntsville, AL; and (by year end) Ace Hardware Alameda Station in Denver.

* Floor & Decor opened stores in Atlanta; Omaha, NE; and Fern Park, FL.

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