Headwaters to acquire Kleer Lumber
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South Jordan, Utah-based Headwaters Inc., a division of Tapco, agreed to acquire the assets of cellular PVC trim and moulding product manufacturer Kleer Lumber.
The purchase price is about $43 million for Kleer, whose products are made at its Westfield, Mass., manufacturing and research and development facility.
Headwaters said it believes the demand for cellular PVC building products is growing due to the ability to cut, mill, shape and install in the same manner as wood products, but with the added benefit of cellular PVC requiring significantly less maintenance than wood. Headwaters intends to introduce Kleer Lumber’s product offerings into its national distribution network, expanding its point-of-sale locations.
According to Headwaters, the acquisition of Kleer Lumber will add a full range of cellular PVC products to Headwaters’ Light Building Products offerings, including trim boards, millwork, sheet stock, paneling and moulding, as well as the company’s recently introduced decking and railing products.
Associated Building Material Distributors hires branding firm
The Associated Building Material Distributors of America (ABM), an association for independent building material and millwork wholesale distributors, has partnered with Modamedia Communications to provide brand, Web and marketing services to the association and serve as a resource to its members. In addition, Modamedia will enhance member and trade communications.
“We are constantly looking for strong partners to better support our organization, our members and industry allied partners,” said Garry Tabor, the organization’s executive VP. “Modamedia is partnering with us on positioning our association in the marketplace, and is a valuable partner and resource to provide marketing services to our member companies for those seeking branding, marketing and communications support services.”
Modamedia is a full-service advertising, marketing and public relations firm that offers marketing planning, brand strategy, advertising, online and interactive marketing, multimedia and video services.
Near term, Modamedia will be working with the ABM team to update the company’s brand strategy, launch a new website, and build a marketing strategy. The new strategy elements will be released at the association’s March 2013 convention.
Based in El Dorado Hills, Calif., ABM is an association for independent building material and millwork wholesale distributors. It was formed in 1975 and currently has 46 member-distributors who serve all 50 states and Canada. ABM has supplier agreements with approximately 65 industry-leading manufacturers.
The association negotiates rebate programs and also conducts management seminars, provides financial analysis, comparative industry benchmarking metrics, and other key industry indicators and trends analysis to its members.
BFS amends loan, increases liquidity
Dallas-based pro dealer Builders FirstSource has announced it amended its first-lien term loan agreement with affiliates of Highbridge Principal Strategies to enhance its liquidity position to support both current and anticipated increases in sales volume.
Floyd Sherman, CEO of Builders FirstSource, said in a prepared statement: "Our year-over-year sales growth exceeded 30% in each of the past four quarters, and we currently see no signs of our sales pace slowing. This strong growth prompted us to proactively seek additional liquidity to support our higher working capital requirements. We believe the $93 million of incremental liquidity to be provided by this transaction will enable us to continue growing market share and take further advantage of improving demand for housing."
Material terms of the amendment include:
• Increasing the principal amount by $65 million;
• The additional principal was issued at 95.5%, resulting in approximately $60 million of net cash received after fees and expenses, with no modifications to interest rate and maturity;
• Reducing the minimum cash requirement from $35 million to $15 million;
• Adding a separate $15 million letter of credit (LC) commitment by SunTrust Bank, which is expected to reduce the company’s current cash collateral requirement for LC’s by approximately $13 million upon satisfaction of certain post-closing conditions; and
• Increasing the minimum specified collateral value to $225 million, contingent upon maintaining certain levels of qualified cash.
Chad Crow, the company’s CFO and senior VP, added: "Our cash usage for fiscal 2012 is expected to be higher than recent guidance due to the increase in working capital necessary to support our higher-than forecasted sales volume, combined with continued commodity lumber and lumber sheet goods price inflation.”
Crow said the LBM chain now expects to end the year with approximately $130 million of cash and $115 million of net liquidity. “Within the next 60 days, we expect an additional $13 million of liquidity to become available upon satisfaction of certain conditions related to our new LC facility," he said.