Bain Capital buys majority stake in US LBM


Building materials distribution giant US LBM reported that it has signed a definitive agreement for Bain Capital Private Equity to acquire a majority stake in the company. 

US LBM will continue to operate under the leadership of President and CEO L.T. Gibson and the current management team. 

Financial terms of the private transaction were not disclosed. But the move could set the stage for larger expansion by US LBM through acquisitions and greenfield openings.

Founded in 2009 with 16 locations in 3 states, US LBM has grown to be a national distributor of specialty building materials operating more than 250 locations and 37 operating divisions. US LBM had sales of $3.5 billion in 2019.

Since the company’s founding, US LBM has opened more than 30 greenfield locations, including six in 2020. The dealer is no stranger to making acquisitions either. 

US LBM announced its acquisition of Zeeland Lumber earlier this month. In August, the company purchased Maner Builders Supply.

Kelso & Co. has been US LBM’s investment partner since August 2015.

US LBM President and CEO LT Gibson.

"We have grown tremendously over the past 11 years, and with Kelso's support we were able to accelerate our acquisition strategy that has positioned us for continued growth," said Gibson. "US LBM's national platform, local go-to-market strategy, relationships with top suppliers, and record of successful integrations continues to make us an acquirer of choice in the building materials industry. We look forward to working with Bain Capital Private Equity and leveraging their experience of helping industrial companies scale and attract additional partners."

The transaction is expected to close in December 2020 and is subject to customary closing conditions, including requisite regulatory approvals.

Debt financing for the transaction is being led by Barclays and will comprise of a new asset based revolving credit facility and a combination of other new debt financing.

 "L.T. and his team have built an impressive, enduring business with a winning model that combines the advantages of national scale with a strong local market strategy," said Stephen Thomas, a managing director at Bain Capital Private Equity. "We believe US LBM is poised for continued growth and expansion as a leading national building materials distributor. We are excited by the opportunity to work with this talented team and to further grow their integrated platform while maintaining the company's unique culture, people-first mindset and commitment to superior customer service."

Barclays is serving as financial advisor, Debevoise & Plimpton as legal counsel, and Ernst & Young as accounting advisor to Kelso and US LBM. Kirkland and Ellis LLP is serving as legal counsel, and PwC as accounting advisor to Bain Capital Private Equity.

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