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Builders FirstSource (BLDR) Buys CTF, Expands Offerings

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In a bid to expand presence, Builders FirstSource, Inc. (BLDR - Free Report) recently announced the acquisition of California TrusFrame (“CTF”). This acquisition will enable Builders FirstSource to expand its product offerings and enlarge its production capacity to serve both new and existing customers all over the residential market. The transaction is valued at $179.5 million.

CTF is a California-based leading manufacturer of prefabricated building components, roof trusses, floor trusses and wall panels. The company offers its products to home builders, framers and contractors for single-family and multi-family end markets across California. During the last 12 months ending Jul 31, 2021, CTF generated revenues of roughly $143 million.

With respect to this, president and CEO of Builders FirstSource, Dave Flitman stated, “We are pleased to strengthen our broad portfolio of industry-leading solutions and valued-added products with the acquisition of CTF.

Buyout Synergies Aiding Growth

Builders FirstSource primarily considers inorganic moves as part of its business growth strategy. Firstly, the company targets to acquire those entities which mainly manufacture prefabricated components and secondly, it focuses on entering new homebuilding markets where it does not currently operate.

On Aug 17, 2021, Builders FirstSource completed the acquisition of WTS Paradigm, LLC. WTS Paradigm is a software solutions and services provider for the building products industry. On Jul 1, Builders FirstSource acquired Alliance Lumber, thereby expanding the company’s reach in Arizona and other fastest-growing areas of the country.

On May 3, Builders FirstSource acquired a family-owned leading supplier of lumber and other building materials company — John’s Lumber. The acquisition improved Builders FirstSource’s product portfolio and expand its reach within Michigan.

On Jan 1, 2021, it completed all-stock merger transaction with BMC. The acquisition of BMC will help it increase its geographical reach in a highly fragmented industry, enhance value-added offerings and generate higher level of free cash flow to invest in growth. During second-quarter 2021, acquisitions contributed to net sales growth of 3.5%.

So far this year, share of Builders FirstSource have surged 33.8% compared with the Zacks Building Products – Retail industry’s 19.4% rally. Along with strategic acquisitions, the company is benefiting from cost synergies, digital solutions, robust housing and repair & remodeling activities.

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Zacks Rank

Builders FirstSource — which shares space with Fastenal Co. (FAST - Free Report) , Beacon Roofing Supply Inc. (BECN - 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.

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