Beacon to acquire Allied Building Products
Beacon Roofing Supply, the largest publicly traded distributor of roofing and complementary building products in North America, will acquire Allied Building Products Corp. for $2.625 billion in cash.
East Rutherford, N.J.-based Allied, owned by the global diversified building products group CRH plc, is one of the country’s largest exterior and interior building products distributors.
The combination of Beacon and Allied will make Beacon one of the largest publicly traded wholesale building materials distributors in North America with pro forma revenues of approximately $7 billion and 593 branches in all 50 states and 6 provinces across Canada.
Robert R. Buck, chairman of Beacon’s Board of Directors, described the acquisition as an historic day for building products distribution. “Allied is among the most established and respected companies in our industry, and we are proud that, through this acquisition, Beacon will become one of North America’s largest publicly traded building materials distributors and will operate locations in all 50 states.
The expanded geographic footprint will allow Beacon to enter new local markets, particularly in New York, New Jersey and the upper Midwest. In addition, acquiring Allied allows Beacon to further strengthen its position in roofing products distribution, while accelerating growth in other key product categories, including siding, windows, doors, decking, trim, waterproofing, insulation and solar, the company said.
Beacon expects to finance the acquisition with approximately $2.2 billion of debt financing
The interior products market, into which Beacon injects itself through this deal, was described by Beacon President and CEO Paul Isabella as “robust, growing and still-consolidating.” Isabella added: “Together, we will leverage the strengths of both companies, while remaining committed to preserving the deep customer relationships that we have each cultivated over 150 years of combined experience.”
The parties currently expect to consummate the transaction on or around January 2, 2018, subject to satisfaction of customary closing conditions.
Founded in 1950, Allied is headquartered in East Rutherford, New Jersey, and distributes products across 208 locations in 31 states.
Sears in Q2: Cutting costs and closing stores
Sears Holdings Corp.'s second-quarter earnings beat the Street as it benefitted from cost-saving initiatives. But it continued to struggle with weak traffic and declining sales, and added 28 more locations to its long list of store closings.
Sears reported that its second-quarter loss narrowed to $251 million, or $2.34 per share, in the quarter ended July 29, helped by cost savings resulting from the streamlining of operations and store closings.
Losses, adjusted for one-time gains and costs, came to $1.16 per share. Analysts had expected a loss of $2.48 per share.
Revenue fell 23% to a better-than-expected $4.37 billion in the period. Same-store sales were down 11.5%, worse than the expected 7.1% decline.
So far in fiscal 2017, Sears has shuttered approximately 180 stores (all were previously announced for closure), with an additional 150 stores (also previously announced) expected to go dark by the end of the third quarter. It is now adding 28 more locations — all Kmarts — to the list of stores that will close later this year.
"We are making progress on the strategic priorities we outlined earlier this year and remain focused on returning our company to profitability," stated Edward S. Lampert, chairman and CEO of Sears Holdings. "The comprehensive restructuring of our operations is delivering cost efficiencies and helping drive improvements to our operating performance.
[See list of closings here.]
Sears said it expects the launch of its Kenmore brand products on Amazon.com will significantly expand the reach of the brand. It also expects the partnership will drive growth opportunities across its Sears Home Services and Innovel Solutions divisions, which will provide "white-glove service" for delivery, installation and extended product protection for the full range of home appliances from Kenmore sold on Amazon.
The company also said it continues to explore opportunities for its Sears Home Services and Sears Auto Centers, as well as its Kenmore and DieHard brands. (On Tuesday, Sears signed new licensing agreements for Kenmore and DieHard brands that will greatly expand their distribution beyond Sears.)
“The decision to sell Kenmore appliances on Amazon is a smart move that will help expand the distribution of the brand," commented Neil Saunders, managing director of GlobalData Retail. “The problem is that both of these initiatives are tiny drops of positivity in a vast ocean of problems and, as such, are not going to save the company.”
Sears said that it has used about $605 million of its $1.5 billion revolving credit facility due in 2020. Its cash balances were $442 million as of July 29.
Quikrete Industry Dashboard
July’s existing-home sales follow the downward pattern set by total starts and single-family starts. Elsewhere on the Quikrete Industry Dashboard, NAICS 444 and 4413 figures show gains for the month of June.
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