Beacon Roofing Shakes Up Sector Again

CEO: Distributor's $2.6 billion purchase of Allied Building Products "transformative."

Beacon Roofing Supply Inc. is poised to climb another spot on MDM’s Top 10 Building Material & Construction Distributors list following last week’s announcement that it will acquire Allied Building Products Corp. for $2.6 billion.

The purchase will create a roofing and building materials distributor with $7 billion in annual sales and a footprint in all 50 states and six Canadian provinces. As Beacon President and CEO Paul Isabella said on a call with analysts last week to discuss the deal, “This is truly a transformative acquisition for both companies.”

It’s also a transformative acquisition for the ever-consolidating building materials & construction sector. From 2013-16, Beacon ranked fourth on MDM’s list of the top distributors in this sector. The company jumped to No. 3 in the most recent rankings following a handful of acquisitions in 2016 and, most notably, its $1.1 billion purchase of Roofing Supply Group in 2015.

This deal surpasses the RSG purchase. Allied Building Products for a few years was the third-largest building materials & construction distributor before dropping to fifth in this year’s rankings as other companies merged and bumped it down the list.

This deal also fits with Beacon’s growth strategy. The company has completed 40 acquisitions since its initial public offering in 2004. After the company completed eight acquisitions and reported record sales in fiscal 2016, Isabella said the company “will remain aggressive on the M&A front as well as fund our internal growth initiatives.”

As M&A picks up across this vertical and others, understanding what’s driving acquisition activity and how to best take advantage of market dynamics – whether you’re a buyer or seller – is paramount. That will be a key part of October’s Distribution M&A Executive Workshop, sponsored by MDM and Indian River Consulting Group.

Learn more and register now for the MDM-IRCG Distribution M&A Executive Workshop, Oct. 9-11 in Austin, TX.

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