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Builders FirstSource (BLDR) Expands Reach in Arizona With Alliance
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Builders FirstSource, Inc. (BLDR - Free Report) has inked a deal to acquire Arizona’s largest independently operated supplier of building materials, Cornerstone Building Alliance SW, LLC (“Alliance”), for approximately $400 million. The acquisition will be funded through a combination of existing cash and credit facilities, and is expected to close in second-quarter 2021, subject to customary closing conditions as well as approvals.
President and CEO of Builders FirstSource, Dave Flitman, said, “This acquisition is aligned with our strategy of investing organically and through M&A, to shift our portfolio toward high-value and faster-growth categories. Alliance’s service area represents the third largest single-family market and includes the fastest growing county, Maricopa, in the country.”
Alliance primarily operates in the greater Phoenix, Tucson and Prescott Valley metropolitan areas. Its geographic footprint represents an excellent strategic fit, which will broaden Builders FirstSource’s product lines with a comprehensive portfolio of premium building materials. Also, Alliance’s market leadership in value-add services across single-family, multi-family and commercial end markets integrates to Builders FirstSource’s network.
In April, Alliance reported approximately $330 million sales for the trailing 12 months. Notably, the buyout is expected to be accretive to Builders FirstSource’s adjusted earnings for 2021.
Acquisitions Aid Builders FirstSource
Acquisitions have been one of the preferred modes of solidifying the company’s presence and product portfolio. Recently, it acquired a family-owned, leading supplier of lumber and other building materials company - John’s Lumber. The acquisition will improve Builders FirstSource’s product portfolio and expand its reach within Michigan.
On Jan 1, it completed the merger with BMC Stock Holdings — one of the nation’s leading providers of diversified building materials and solutions to new construction builders as well as professional remodelers. BMC’s distinct millwork capability, READY-FRAME offerings and other manufactured products complement Builders FirstSource’s strength in trusses as well as manufactured components, among other offerings. Also, it will now be able to invest more in innovation and develop targeted solutions that will be provided by highly-skilled team members. This enables the company to provide best-in-class service to customers and communities.
In first-quarter 2021, the company generated $4.2 billion of total net sales, up 54.1% from a year ago. The uptick was driven by its merger with BMC and other acquisitions, commodity inflation as well as strong organic growth.
Adjusted earnings also rose 302.5% year over year from a combined pro-forma earnings of 28 cents reported a year ago. Adjusted EBITDA and adjusted EBITDA margin rose a whopping 186.8% and 500 basis points year over year, respectively. Strong demand in the residential housing market, commodity value and disciplined cost management aided the company.
During the period, last year’s acquisitions (excluding the BMC merger) added 2.4% to total net sales. Notably, it expects 2% net sales contribution from the two latest buyouts in 2021.
Shares of this largest supplier of building products, prefabricated components and value-added services company have gained 116.4% in the past year compared with the industry’s 36.6% rally.
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Builders FirstSource (BLDR) Expands Reach in Arizona With Alliance
Builders FirstSource, Inc. (BLDR - Free Report) has inked a deal to acquire Arizona’s largest independently operated supplier of building materials, Cornerstone Building Alliance SW, LLC (“Alliance”), for approximately $400 million. The acquisition will be funded through a combination of existing cash and credit facilities, and is expected to close in second-quarter 2021, subject to customary closing conditions as well as approvals.
President and CEO of Builders FirstSource, Dave Flitman, said, “This acquisition is aligned with our strategy of investing organically and through M&A, to shift our portfolio toward high-value and faster-growth categories. Alliance’s service area represents the third largest single-family market and includes the fastest growing county, Maricopa, in the country.”
Alliance primarily operates in the greater Phoenix, Tucson and Prescott Valley metropolitan areas. Its geographic footprint represents an excellent strategic fit, which will broaden Builders FirstSource’s product lines with a comprehensive portfolio of premium building materials. Also, Alliance’s market leadership in value-add services across single-family, multi-family and commercial end markets integrates to Builders FirstSource’s network.
In April, Alliance reported approximately $330 million sales for the trailing 12 months. Notably, the buyout is expected to be accretive to Builders FirstSource’s adjusted earnings for 2021.
Acquisitions Aid Builders FirstSource
Acquisitions have been one of the preferred modes of solidifying the company’s presence and product portfolio. Recently, it acquired a family-owned, leading supplier of lumber and other building materials company - John’s Lumber. The acquisition will improve Builders FirstSource’s product portfolio and expand its reach within Michigan.
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On Jan 1, it completed the merger with BMC Stock Holdings — one of the nation’s leading providers of diversified building materials and solutions to new construction builders as well as professional remodelers. BMC’s distinct millwork capability, READY-FRAME offerings and other manufactured products complement Builders FirstSource’s strength in trusses as well as manufactured components, among other offerings. Also, it will now be able to invest more in innovation and develop targeted solutions that will be provided by highly-skilled team members. This enables the company to provide best-in-class service to customers and communities.
In first-quarter 2021, the company generated $4.2 billion of total net sales, up 54.1% from a year ago. The uptick was driven by its merger with BMC and other acquisitions, commodity inflation as well as strong organic growth.
Adjusted earnings also rose 302.5% year over year from a combined pro-forma earnings of 28 cents reported a year ago. Adjusted EBITDA and adjusted EBITDA margin rose a whopping 186.8% and 500 basis points year over year, respectively. Strong demand in the residential housing market, commodity value and disciplined cost management aided the company.
During the period, last year’s acquisitions (excluding the BMC merger) added 2.4% to total net sales. Notably, it expects 2% net sales contribution from the two latest buyouts in 2021.
Shares of this largest supplier of building products, prefabricated components and value-added services company have gained 116.4% in the past year compared with the industry’s 36.6% rally.
The company — which shares space with Fastenal Company (FAST - Free Report) , Lumber Liquidators Holdings, Inc. (LL - Free Report) and Beacon Roofing Supply, Inc. (BECN - Free Report) in the Zacks Building Products - Retail industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>