SRS Distribution Inc. last week opened three locations, another example of the McKinney, TX, roofing distribution holding company following through on the growth plans that President and COO Dan Tinker outlined earlier this year.
In an interview with MDM in May, Tinker said the company is focused on three growth drivers, including organic improvement in its existing footprint, strategic acquisitions and adding greenfield locations "where we can't find good, attractive acquisitions."
In addition to the three new locations in Utah, Pennsylvania and Arkansas this month, SRS Distribution in April opened two Roofline Supply & Delivery locations in Castroville, CA, and Honolulu, HI.
Also in April, the company acquired Advanced Building Products, Harahan, LA, a regional independent distributor of roofing, siding, windows, gutters and related residential and commercial building products, supplies and services. The purchase, along with others SRS Distribution has made since its founding in 2008, fit with the company's acquisition focus.
"We're very selective and look at deals all across the country that complement our geography and that are core to our product mix focus, which is heavily centered around roofing," Tinker said, noting that the Advanced Building Products purchase marked the 41st acquisition in seven years of building the company. "I expect five to seven (acquisitions) a year, and maybe even to accelerate a little bit in the next couple years."
Tinker said M&A activity is bustling for a number of reasons, including strong valuations and easy access to credit. But, he said, the timing is especially favorable now because the "baby boomer owners of independent, smaller or regional distributors in our industry … have less desire to keep it in the family."
"There's a higher interest than we've ever really seen of owners to transition out of the business and either diversify their wealth or decide to move on," Tinker said, adding that he has seen risk tolerance lessen in this generation from the previous one. "They just don't have the same appetite for risk that their parents did."
Because of this diverse, aggressive growth strategy, look for the company to be included in next year's MDM Market Leaders for building materials and construction.