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Builders FirstSource to Enhance Footprint by Acquiring Alpine

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Builders FirstSource, Inc. (BLDR - Free Report) is set to expand its footprint in its West Division by acquiring Alpine Lumber Company.

BLDR stock inched up 0.4% in the after-hours trading session on Monday, post the acquisition announcement.

More on BLDR’s New Acquisition

The Colorado-based company will bring in 21 locations, serving homebuilders and contractors across the Front Range of Colorado, western Colorado and northern New Mexico, to BLDR’s portfolio. Additionally, the acquisition will also enhance the company’s product offerings, given Alpine’s broad product range including prefabricated trusses, wall panels and millwork.

This strategic transaction is expected to benefit Builders FirstSource’s adjusted earnings per share in 2025. Notably, in the trailing 12 months, Alpine reported about $500 million worth of sales, indicating the underlying strength it is to offer BLDR once acquired.

Upon the satisfaction of customary closing conditions, Alpine acquisition is expected to close early in the first quarter of 2025. The transaction is to be funded through a mixture of existing cash and credit facilities.

Accretive Acquisition Benefits Builders FirstSource

Acquisitions are an important part of Builders FirstSource's growth strategy to supplement its organic growth and expand extensively across vast geographic boundaries. The company is advancing diverse improvements by value-added share growth while expanding through tuck-in acquisitions. Its recent acquisitions have enhanced its value-added offerings and broadened its customer base in attractive markets.

During the first nine months of 2024, it completed several acquisitions including Quality Door & Millwork, Inc., Hanson Truss Components, Inc., RPM Wood Products, Inc., Schoeneman Bros. Company, TRSMI, LLC, Western Truss & Components, CRi SoCal, Wyoming Millwork Co., Sunrise Wood Designs, LLC, Reno Truss, Inc. and High Mountain Door and Trim, Inc. BLDR expects that the acquisitions completed in the last 12 months will add up to 2-2.5% in total net sales growth in 2024.

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Shares of this supplier of building materials, manufactured components and construction services have gained 9.1% in the past six months compared with the Zacks Building Products - Retail industry’s 15.5% growth. A weakening multi-family housing market and the cyclical market nature are hurting its prospects. However, a strong value-added product portfolio, focusing on investing in innovations and enhancing digital solutions for its customers, is expected to foster Builders FirstSource’s growth in the upcoming period.

BLDR’s Zacks Rank & Key Picks

Builders FirstSource currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.

The Gap, Inc. (GAP - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GAP has a trailing four-quarter earnings surprise of 101.2%, on average. The stock has declined 2.5% in the past six months. The Zacks Consensus Estimate for GAP’s fiscal 2025 sales and earnings per share (EPS) indicates growth of 2.1% and 6.6%, respectively, from the year-ago period’s levels.

Brinker International, Inc. (EAT - Free Report) presently sports a Zacks Rank of 1. EAT has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 79.4% in the past six months.

The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 8.6% and 37.6%, respectively, from the year-ago period’s levels.

Sprouts Farmers Market, Inc. (SFM - Free Report) currently sports a Zacks Rank of 1. SFM has a trailing four-quarter earnings surprise of 15.3%, on average. The stock has gained 55.9% in the past six months.

The Zacks Consensus Estimate for SFM’s 2025 sales and EPS indicates a rise of 10% and 14.4%, respectively, from the year-ago period’s levels.

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