While the biggest headlines in construction supply M&A during May involved acquisitions by US LBM and Builders FirstSource, they were only part of the story. Webb Analytics spotted five other deals involving 22 branches as well as eight greenfield openings.
In other action over the past month:
GMS bought Westside Building Material, a drywall specialist with nine locations in California and one in Nevada.
TAL Holdings bought Badger Building Center, which has operations in Bonners Ferry, Post Falls, and Sagle, ID, as well as in Kalispell, MT.
SRS Distribution purchased Arrowhead Building Supply, which has four locations in Missouri and one in Arkansas.
The owner of a local granite shop bought Latvala Lumber in Grand Rapids, MN, from the Latvala family.
SRS's Heritage Landscape Supply Group acquired Beehive Brick & Building, with operations in South Salt Lake and Sandy, UT. Heritage also opened six new locations in the Houston, San Antonio, and Austin markets.
Roofing and exteriors specialist ABC Supply opened a new location in Port St. Lucie, FL.
Westlake Ace Hardware opened a new store in St. Peters, MO, in May. The location formerly was the site of a True Value Hardware Store that closed Nov. 30.
Panther Valley Lumber & Home Center in Lansford, PA, has closed.
All that action might have gotten more attention had it not been for what US LBM and BFS did.
In May, US LBM announced it had acquired American Construction Source, which operates more than 70 locations from the Midwest to the Pacific, including the first operations US LBM will have in Colorado and Washington State. ACS recorded $703.2 million in sales last year, according to Webb Analytics' Construction Supply 150.
Also in May, US LBM absorbed Higginbotham Bros., a 40-location, $131 million operation that's primarily in Texas with a few outposts in Oklahoma. Those two deals alone enabled US LBM to grow by more than one-third to have nearly 400 locations nationwide.
BFS' purchases weren't as extensive, but they were noteworthy. First, BFS moved into the Detroit market in May by acquiring John's Lumber, which has yards in Clinton Township and Shelby Township, MI, and had sales of $49 million over the past 12 months.
Then came a much bigger deal: acquisition of the Alliance Lumber group of companies in Phoenix, one of America's hottest markets. Alliance had sales of $330 million over the 12-month period ending in April. BFS paid $400 million to nab the company.
The BFS and US LBM deals also are notable for the relatively short lifespans of the previous owners and how both of the selling companies had roots in Stock Building Supply. Cornerstone Building Alliance bought the Alliance operations in September 2012. It was intended to be the first major purchase of an investment group that featured two former Stock Building Supply executives, Fenton Hord and Steve Short. Hord died on March 9.
ACS was even younger, launched in September 2018 by Angeles Equity Partners and Clearlake Capital Group. ACS' CEO was James Drexinger, a former SVP at Stock. ACS started in September 2018 by buying Meek's Lumber and then going on to buy dealers in Minnesota, Wisconsin, Colorado, northern California, Arkansas, and Washington State.
Time will tell whether ACS will buy LBM operations again.
While all this was happening, a number of dealers were putting themselves up for sale, typically using web services to advertise themselves:
Walker Lumber in Minong, WI, is available. A $600,000 payment buys the land, equipment, and store fixtures. The inventory, worth $670,000, is being sold separately. Contact firstname.lastname@example.org.
An unnamed hardware store and lumberyard in Texas' Hill Country with $1.3 million in annual gross revenue is on sale for $1.45 million. The price includes inventory, real estate, and fixtures.
In Augusta, ME, an unnamed lumberyard with $2.7 million in gross revenue is for sale for $1.4 million. Neither real estate nor inventory are included in the sale price.
Northwest Pennsylvania is home to a lumberyard with $2.7 million in annual gross revenue that's for sale for $1.9 million. That price includes $675,000 in inventory, $300,000 in equipment, and $925,000 worth of real estate.