Exclusive: Builders FirstSource in talks to acquire ProBuild - sources

Thu Mar 26, 2015 8:18pm EDT
 
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By Greg Roumeliotis

(Reuters) - Builders FirstSource Inc BLDR.O, a U.S. supplier of residential building products, is in discussions to acquire peer ProBuild Holdings Inc for approximately $1.5 billion, including debt, three people familiar with the matter said on Thursday.

A deal would underscore the U.S. homebuilding sector's consolidation, as companies that are gradually recovering from the impact of the 2008 financial crisis on the property market seek synergies to boost profits.

The negotiations between Builders FirstSource and privately held ProBuild are ongoing and may not lead to an agreement, the people said. Other bidders for ProBuild could also emerge, they added.

The sources asked not to be identified because the discussions are confidential. Builders FirstSource and ProBuild representatives declined to comment.

The deal would be transformational for Builders FirstSource, which currently has a market capitalization of around $600 million and debt of $384 million as of the end of December.

Based in Dallas, Builders FirstSource makes and distributes building products to homebuilding companies. It operates 56 distribution centers and 56 manufacturing facilities, mainly in the southern and eastern United States.

Builders FirstSource reported sales of $1.6 billion and income from continuing operations before income taxes of $19.7 million in 2014, up from sales of $1.5 billion and a loss from continuing operations before income taxes of $41.6 million in 2013.

Fergus Falls, Minnesota-based ProBuild operates about 400 lumber and building product distribution, manufacturing and assembly centers serving 42 U.S. states.   Continued...