Builders FirstSource, Inc.
NASDAQ: BLDR
BLDR Shares Soar 67% On ProBuild Deal
Builders FirstSource (NASDAQ:BLDR), a supplier and manufacturer of structural and related building products for new construction moved sharply higher in Monday’s trading as the company announced it had entered into a definitive purchase agreement to acquire ProBuild Holdings, one of the largest professional building materials suppliers, in an all cash deal valued at nearly $1.63 Billion.
This acquisition for Builders FirstSource will add an additional $4.5B in revenue, totaling a combined value of nearly $6.1B in annual revenue based on 2014 levels. This deal will position the company to capitalize greatly as analysts are predicting a jump in new home sales in late 2015 as the housing market continues its recovery.
Builders FirstSource CEO, Floyd Sherman, said “We are very pleased to announce this compelling combination with ProBuild to create a more diversified company with enhanced scale and an improved geographic footprint that will drive significant value for our customers and stockholders. As the U.S. housing market continues its recovery, we believe now is the ideal time to position Builders FirstSource for its next phase of growth and value creation.”
The deal also brings significant cost savings advantages. It is expected that the cost savings will range between 100-200M and realized by 2017. The deal is still pending regulatory approval, however, as it stands now it is on track to close late 2015. You can read the official press release here.
*Nothing posted constitutes investment advice
