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UFP Industries (UFPI) Acquires Ultra, Expands Portfolio

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UFP Industries, Inc.’s (UFPI - Free Report) subsidiary Deckorators, Inc. has acquired Howell, MI-based leading manufacturer of aluminum fencing, gates and railing, Ultra Aluminum Manufacturing Inc., for approximately $25 million. The deal includes $2 million to be paid if certain future performance goals are met.

Founded in 1996, Ultra designs and produces an extensive selection of ornamental aluminum fence and railing products for contractors, landscapers, dealers as well as wholesalers. The company generated approximately $46 million sales for the trailing 12-month period through November 2021. Consistent with its product innovation idea, the buyout will help UFP Industries to add aluminum fencing to the existing portfolio of vinyl and wood fencing.

Landon Tarvin, vice president of Deckorators, said, “Ultra has a diverse product line, including railing, a loyal and diversified national customer base, and a reputation for quality and professionalism that leads the industry. We’re thrilled to have them as a complement to our existing Deckorators deck and railing business.”

Acquisition Strategy a Boon

Acquisitions have been a preferred mode of solidifying UFP Industries' product portfolio and leveraging new business opportunities. On Dec 20, its affiliate UFP Packaging, LLC acquired Grand Rapids, Michigan-based Advantage Label & Packaging, Inc. for approximately $16 million. The deal includes $2.9 million for related real estate and incentive payments of up to $4.5 million over five years, subject to certain performance goals.

Again on Nov 22, its affiliate UFP Global Holdings Ltd. took over 70% of the equity of Ficus Pax Private Limited, which marked the company’s foray into India. The transaction was valued at $13.5 million.

Earlier on Sep 27, it acquired the operating assets of Haleyville, AL-based Shelter Products, Inc. for $6.5 million. Shelter Products’ 87,800 sq.-ft. warehouse provides distribution and logistics support to manufactured housing industry customers. Its close proximity to a UFP manufacturing facility, which supplies trusses to manufactured housing builders, will enable additional operational synergies.

Zacks Investment ResearchImage Source: Zacks Investment Research

UFP Industries’ shares have gained 63.2% so far this year compared with the Zacks Building Products – Wood industry’s 40.5% rally. Also, earnings estimates for 2021 have remained stable at $7.64 per share over the past 60 days, indicating 91% year-over-year growth. UFP Industries is benefiting from a solid U.S. residential market and high demand for repair and remodeling activities. Also, buyout gains and shareholders' rewards will work in its favor.

Zacks Rank & Key Picks

UFP Industries currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boise, ID-based Boise Cascade Company (BCC - Free Report) — which makes wood products and distributes building materials in the United States as well as Canada — is aided by factors like favorable commodity wood products, pricing, and robust construction activity.

Boise Cascade, a Zacks Rank #1 stock, is expected to witness 159.1% growth in 2021 earnings. Shares of the company have jumped 60.5% in the year-to-date period.

Louisiana-Pacific Corporation (LPX - Free Report) is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products, and exterior siding for use in residential, industrial, and light commercial construction. It operates through four segments: Siding, Oriented Strand Board, Engineered Wood Products and South America.

Louisiana-Pacific’s shares have appreciated 114.7% in the year-to-date period. LPX has an expected earnings growth rate of 213.2% for the current year.

Weyerhaeuser Company (WY - Free Report) is one of the leading U.S. forest product companies. The company has been benefiting from solid new residential construction activity, which in turn is leading to improved demand. Also, its focus on operational excellence has been advantageous over time.

Weyerhaeuser’s has an expected earnings growth rate of 161.2% for the current year. Shares of the company have jumped 22.2% in the year-to-date period.

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