Stock Building Supply and Building Materials Holding Corporation have signed a definitive merger agreement under which the two companies combine through an all-stock transaction. The new company as a result of the merger is expected to have an implied pro forma enterprise value of $1.5 billion, a value that is based on Stock Building Supply’s closing price on June 2nd.
The merger of Stock Building Supply and Building Materials Holding Corporation will create a premier provider of lumber, building products and construction services with over $2.7 billion in pro forma 2014 revenues as well as enhanced product and service offerings. The combined company will also enjoy a larger geographic reach in productive regions across the United States. The combination will also benefit from huge technology capabilities and deep industry expertise that will lead to profitable growth and customer service.
Jeff Rea, President and Chief Executive Officer of Stock Building Supply, has mentioned in a statement “We expect this compelling strategic merger will provide significant benefits for customers, shareholders, suppliers and associates of both companies.” He also said “The continuing recovery of the U.S. housing market is expected to generate strong demand for building materials, services and solutions, and together we believe BMC and Stock Building Supply are better positioned to capitalize on this opportunity. Upon close of this transaction, I look forward to continuing on our board to support the combined company and have great faith in the combined leadership team’s ability to create significant shareholder value by accelerating the implementation of our common strategies.”
Peter Alexander, BMC’s Chief Executive Officer, said “We are very pleased to be uniting two leading companies with complementary strategies, products and services; a shared commitment to superior customer experiences; strong internal performance-based cultures and operations in high-demand geographies. The combination of our two highly complementary platforms will enhance our ability to provide customers with best-in-class products and services across an expanded geographic footprint. We have great respect for what the team at Stock Building Supply has accomplished and upon close of this transaction; I look forward to leading the combined team as we enter the next exciting phase of our transition and the ability to fund our growth.”
The Board of Directors of both companies has approved the details of the merger. BMC shareholders will receive 0.5231 newly issued Stock Building Supply shares for each BMC share. Upon the closing of the transaction, BMC shareholders will own approximately 60% of the merged entity, with Stock Building Supply shareholders owning approximately 40%. The transaction is structured to be tax-free to the shareholders of both companies, and is expected to close in the fourth quarter of 2015, subject to approval by both Stock Building Supply and BMC shareholders and typical regulatory clearances.
About Stock Building Supply
Stock Building Supply is a leading building materials and solutions company in the United States. The company specializes in high quality customer experience for builders and contractors who are engaged in single- and multi-family residential, repair and remodel and light commercial construction. Stock was founded as Carolina Builders Corporation (CBC) in Raleigh, North Carolina, in 1922. The Gores Group, LLC, a private equity firm focused on acquiring controlling interests in mature and growing businesses purchased a majority ownership of Stock in 2009. Because of Gores’ expertise, Stock is now a stronger, more focused and innovative company with great locations found across the United States. In addition to its core residential building materials business operating under the Stock name, other Stock subsidiaries are Coleman Floor, Smoot Lumber and Bison. Stock Building Supply stock market evolution: http://finance.yahoo.com/q?s=STCK
About Jeff Rea
Jeff Rea is the President and CEO of Stock Building Supply. Jeff Rea joined Stock Building Supply in 2010 as President and CEO. Before joining Stock, he served as President of the Specialty Products Group at TE Connectivity (TEL), which was comprised of four separate global businesses. Jeff has a degree in mechanical engineering from Rose-Hulman Institute of Technology in Terre Haute, Indiana.
About Building Materials and Construction Services
BMC – Building Materials & Construction Services is an American construction supply company headquartered in Boise, Idaho. It provides diversified building materials, trusses and components, doors and millwork, and construction and installation services across 88 business units in 16 markets in 10 states, 8 of which are in the top 25 single family construction markets. Building Materials and Construction Services stock market evolution: http://www.bloomberg.com/quote/BLG:US
About Peter C. Alexander
Peter C. Alexander is the CEO of Building Materials and Construction Services. He has served as a board director, and was named CEO in 2010. He has led businesses in the U.S. and over 25 countries. He has completed and integrated 41 acquisitions across the globe. Mr. Alexander attended the University of Stockholm, holds a Bachelor of Arts degree from The Ohio State University and a Master of Business Administration from The Pennsylvania State University.
