Beacon to buy Roofing Supply, expands in key housing markets
(Reuters) - Beacon Roofing Supply Inc BECN.O will buy roofing products distributor Roofing Supply Group in a deal valued at about $1.1 billion, to expand in key housing markets of California, Florida and Texas.
Beacon, which has a market value of about $1.5 billion, will acquire Roofing Supply from investment firm Clayton, Dubilier & Rice.
Shares of Beacon were up 13 percent at a year high of $33.99 on the Nasdaq in early trading.
U.S. construction suppliers are benefiting from burgeoning demand with the housing market well into its fourth year of recovery after the financial crisis.
States in the U.S. south and southwest have led the comeback in homebuilding, helped by some of the country's strongest job rates.
As a result of the acquisition, Clayton, Dubilier & Rice will own about 15 percent of the pro-forma company and will also have two seats on the board of the combined company, Beacon said on a conference call.
The deal will increase Beacon's revenue to about $3.7 billion and give the company greater access to 45 states and six provinces across Canada, it said. Beacon reported revenue of $2.33 billion in 2014.
The acquisition of Roofing Supply, which has presence in 24 U.S. states, provides Beacon access to the Pacific Northwest.
The deal will boost Beacon's presence in California by 75 percent and in Texas and Florida by as much as 50 percent, the company said. Continued...