Platinum Equity to Buy Stake in US LBM from Bain Capital - Modern Distribution Management

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Platinum Equity to Buy Stake in US LBM from Bain Capital

A recent report from Bloomberg stated that the minority stake of US LBM is valued at approximately $7 billion.

Buffalo Grove, Illinois-based building materials distributor US LBM announced Oct. 16 the signing of a definitive agreement for Platinum Equity to acquire a stake in the company from Bain Capital Private Equity.

Under the agreement, Bain Capital and Platinum Equity will have equal ownership stakes and joint board governance. US LBM will continue under the leadership of Founder, President and CEO L.T. Gibson and the current management team. Financial terms of the private transaction were not disclosed; however, a report from business outlet Bloomberg states the minority stake is worth approximately $7 billion.

“Our strategy of combining our national scale with a strong local market focus has continued to drive significant growth for US LBM, and Bain Capital’s support has helped accelerate our expansion into several new housing markets while furthering investment in our people, operations and technology to enhance the value we bring to our suppliers, customers and communities,” said Gibson. “US LBM’s national platform, strong supplier relationships, commitment to operational excellence and boosting organic in-market growth continue to make us an acquirer of choice in the building materials industry. We look forward to working with Platinum and our ongoing partnership with Bain Capital. Their combined operational expertise and experience in the building products space will be a significant asset in driving the growth and expansion of our business.”

Founded in 2009, US LBM has grown into one of the most-well-known distributors of specialty building materials, with more than 450 locations throughout the U.S. In the past three years, the company said it has approximately tripled sales and profit as a result of an accretive M&A strategy, and investments in data and analytics, supply chain optimization and customer experience.

“We are excited to continue our successful collaboration with L.T. and the talented US LBM team,” said Stephen Thomas, a Partner at Bain Capital Private Equity. “As the fundamental outlook for new home construction in the U.S. remains strong, we believe the company is poised to further build out its integrated platform through organic growth initiatives and strategic acquisitions.”

Platinum Equity also recently signed a definitive agreement to acquire Cook & Boardman, a specialty distributor of commercial door and security integration solutions. Other building products companies in the firm’s current portfolio include:

  • JELD-WEN’s Australasia business.
  • Cabinetworks, a leading US manufacturer and distributor of kitchen and bath cabinets.
  • PGS, a provider of hard surface floor coverings.

The US LBM deal is expected to close by the end of 2024’s first quarter and is subject to customary closing conditions, including requisite regulatory approvals.

According to data reviewed by Bloomberg, Bain acquired US LBM three years ago using a $1.35 billion term loan and $500 million bond. After the acquisition, the company paid itself a $400 million dividend using a payment-in-kind bond, which allowed it to repay the interest with more debt, according to the report.

On MDM’s 2023 Top Distributors Lists, US LBM ranks No. 3 among building materials/construction.

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