Pro-Build agrees to purchase HD Supply unit
Pro-Build Holdings, the industry’s largest pro dealer, has signed a letter of intent to purchase the LBM division of HD Supply. Although the Denver-based company confirmed the agreement, a spokeswoman declined to discuss the deal.
“We’ll have more comments as we get further along in the process,” said Carolyn Atkinson, director of marketing and communications for Pro-Build, which is owned by Fidelity Capital.
The acquisition will bring Pro-Build two premium lumberyard chains, Williams Bros. in Atlanta and Cox Lumber in Florida, as well as Forest Products Supply, a St. Petersburg, Fla., dealer.
The deal may be the first time a pro dealer has changed hands between major players in the private equity world. HD Supply is currently owned by Bain Capital; Carlyle Group; and Clayton, Dubilier & Rice, who joined together to buy the business from Home Depot for $8.5 million on Aug. 23.
Lauren Falcone, a spokeswoman for HD Supply, said the sale includes “substantially all of the assets” of the company’s lumber and building materials business, which operates 19 lumberyards in the Atlanta area and 20 in Florida. In addition, HD Supply’s holdings include 32 truss plants, 10 engineered lumber production facilities and a construction services division, according to its Web page.
It is not certain that all of these locations are still open, as HD Supply has been consolidating its locations in the Southeast. Pro-Build’s plans for the HD Supply assets are also unclear. Through the acquisition of Hope Lumber in 2006, Pro-Build already operates lumberyards in Florida and Georgia, some of them close to HD Supply locations. Earlier this year, the $5.9 billion dealer purchased two truss plants in Florida and Dunn Lumber, a seven-unit pro dealer headquartered in Daytona Beach, Fla.
But Pro-Build may not be looking for a perfect geographical fit.
“It’s going to take some supply out of the market and get Pro-Build further into this geography, which is the point of that transaction,” said Keith Hughes, an analyst who covers building materials for SunTrust Robinson Humphrey.
The deal also signals that Pro-Build’s owners are in the LBM distribution business for the long haul. Looking past the current downturn, HD Supply may help Pro-Build develop some of its value-added services, particularly in the area of installation. According to its Web site, HD Supply installs framing, siding, windows and doors, decks, housewrap, roofing, interior trim and locksets. The company also has a separate division that deals with sales to multi-family builders.
While the purchase price may never be known, it’s likely that the three businesses sold for substantially less than Home Depot paid for them during its HD Supply buying spree. “The cash generated by these businesses is severely depressed given what’s going on in the market right now,” said Hughes. “I think [the price] was probably pretty close to book value.”
Laticrete expands Texas facility
Laticrete, a manufacturer of systems for the installation of ceramic tile and stone, recently marked the completion of an $8 million, 50,000-square-foot expansion to its Grand Prairie, Texas, manufacturing and warehousing facility.
The expansion — which more than doubled the size of the operation to 90,000 square feet — was done to meet increased demand for Laticrete system materials in the Dallas-Fort Worth area.
The ribbon cutting ceremony on Nov. 28 was attended by Laticrete co-owner and senior vp Henry B. Rothberg and other officials from the company’s headquarters in Bethany, Conn.
Canarm names new president
James A. Cooper has been named president of Canarm, according to an announcement from the home goods maker.
Cooper has more than 25 years experience at Canarm, a Canada-based global manufacturer of lighting, ventilation and related products for residential, commercial and agricultural markets.
Most recently, Cooper served as vp-sales and marketing, helping Canarm’s customers build their market share.
Canarm is headquartered in Brockville, Ontario, and has five satellite manufacturing plants in Ontario and one in Illinois, as well as a distribution center in Montreal. The company is privately owned and operated and has more than 300 full-time employees.