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Beacon Roofing (BECN) Completes the Sale of Interior Products
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Beacon Roofing Supply, Inc. (BECN - Free Report) recently announced the sale of its interior products and insulation businesses (Interior Products), in line with the company’s efforts to improve financial flexibility and focus on its core exteriors business. Beacon sold Interior Products to Foundation Building Materials, majority-owned by units of American Securities LLC, a leading U.S. private equity firm. The transaction is valued at $850 million, which is subject to some adjustments.
With this divestiture, the company is committed toward growing sales and profitability as well as pursuing strategic growth initiatives for its core exteriors business. The divestment will help Beacon return to its legacy position as a focused leader with exterior building products distribution. Notably, 80-85% of the company’s continuing business will be within residential and commercial roofing. Driven by high concentration on non-discretionary repair and remodel demand, exteriors offer a unique platform for the company.
Beacon plans to use the expected after-tax proceeds of $750 million from this divestiture to reduce net leverage and strengthen its balance sheet.
Beacon’s President and Chief Executive Officer, Julian Francis, stated, ‘’Finalizing the sale of Interior Products represents a transformational event for our Company, as we focus on growing our core exteriors business, proceeds from the sale significantly enhance our financial flexibility.”
Share Price Performance
Beacon Roofing’s shares have outperformed the industry in the past six months. Earnings estimates for the current year have been trending upward over the past 30 days, depicting analysts’ optimism over the company’s growth prospect.
Recently, the company came up with strong results for first-quarter fiscal 2021. Its bottom line topped the Zacks Consensus Estimate, mainly backed by a solid residential backdrop, stronger gross margins and reduced operating expenses. Its increased focus on the e-commerce platform, new OTC (On-Time and Complete) Delivery Network and a newly-designed website are other positives.
For fiscal 2021, the company expects sales from continuing operations to grow in the high single digit. Adjusted EBITDA is projected in the range of $500-$525 million for continuing operations. This improvement reflects strong sales growth, gross margin gains and favorable operating leverage.
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Beacon Roofing (BECN) Completes the Sale of Interior Products
Beacon Roofing Supply, Inc. (BECN - Free Report) recently announced the sale of its interior products and insulation businesses (Interior Products), in line with the company’s efforts to improve financial flexibility and focus on its core exteriors business. Beacon sold Interior Products to Foundation Building Materials, majority-owned by units of American Securities LLC, a leading U.S. private equity firm. The transaction is valued at $850 million, which is subject to some adjustments.
With this divestiture, the company is committed toward growing sales and profitability as well as pursuing strategic growth initiatives for its core exteriors business. The divestment will help Beacon return to its legacy position as a focused leader with exterior building products distribution. Notably, 80-85% of the company’s continuing business will be within residential and commercial roofing. Driven by high concentration on non-discretionary repair and remodel demand, exteriors offer a unique platform for the company.
Beacon plans to use the expected after-tax proceeds of $750 million from this divestiture to reduce net leverage and strengthen its balance sheet.
Beacon’s President and Chief Executive Officer, Julian Francis, stated, ‘’Finalizing the sale of Interior Products represents a transformational event for our Company, as we focus on growing our core exteriors business, proceeds from the sale significantly enhance our financial flexibility.”
Share Price Performance
Beacon Roofing’s shares have outperformed the industry in the past six months. Earnings estimates for the current year have been trending upward over the past 30 days, depicting analysts’ optimism over the company’s growth prospect.
Recently, the company came up with strong results for first-quarter fiscal 2021. Its bottom line topped the Zacks Consensus Estimate, mainly backed by a solid residential backdrop, stronger gross margins and reduced operating expenses. Its increased focus on the e-commerce platform, new OTC (On-Time and Complete) Delivery Network and a newly-designed website are other positives.
For fiscal 2021, the company expects sales from continuing operations to grow in the high single digit. Adjusted EBITDA is projected in the range of $500-$525 million for continuing operations. This improvement reflects strong sales growth, gross margin gains and favorable operating leverage.
Zacks Rank
Beacon Roofing — which shares space with Builders FirstSource, Inc. (BLDR - Free Report) , Fastenal Company (FAST - Free Report) and Lowe's Companies, Inc. (LOW - 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.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>