Beacon Roofing Acquires AWP to Expand in Vancouver - Analyst Blog

By
A A A

The roofing material distributor Beacon Roofing Supply, Inc. ( BECN ) has acquired All Weather Products Ltd. (AWP) along with its three branches, with an aim to expand in Vancouver. Financial terms of the transaction were not disclosed.

AWP is a distributor of primarily residential roofing systems and related accessories with attractive, innovative and architecturally appealing roofing styles, as well as complete roofing solutions with great value.

The acquisition of AWP together with its three branches in Vancouver, Canada suburbs of Surrey, Kelowna and Burnaby, is a strategic fit for Beacon Roofing and is expected to facilitate its growth through geographical expansion.

Beacon Roofing's growth strategy includes both internal growth and growth through acquisition. On Nov 2012, the company purchased McClure-Johnston, a distributor of residential and commercial roofing products and related accessories for about $64.6 million. Further in Dec 2012, it purchased the assets of Ford Wholesale Co.

Beacon Roofing is also keen on growing internally by opening branches, growing sales with existing customers and introducing new products. During the first nine months of 2014, the company opened 17 new branches, increasing overall branch count by more than 7% from the beginning of the fiscal year.

The company expects the strong demand to continue in the fourth quarter of fiscal 2014, benefiting from its diverse product offering along with its greenfield strategy and lead to sales growth in the range of 7% to 10% for the fourth quarter compared with the 7.4% organic growth in the fourth quarter of 2013. For the full year, Beacon Roofing expects organic sales growth in the range of 4% to 5%.

Beacon Roofing remains on track to open 25 new branches in 2014. These new branches should add 2% organic growth for the year. For 2015 and beyond, Beacon Roofing is planning to open at least 20 branches per year.

The complementary product business will grow in the balance of fiscal 2014, driven by development in new construction and remodeling activity. Commercial business will also expand in the second half, given the number of projects and bids currently in process.

Peabody, MA-based Beacon Roofing is one of the major distributors of residential and non-residential roofing materials as well as complementary building products in the U.S. and Canada, with more than 90% of sales coming from the U.S.

Beacon Roofing currently has a Zacks Rank #5 (Strong Sell). However, some better-ranked stock in the same industry include The Home Depot, Inc. (HD), Boise Cascade Company (BCC) and KB Home (KBH). All these stocks carry a Zacks Rank #2 (Buy).

The roofing material distributor Beacon Roofing Supply, Inc. (BECN) has acquired All Weather Products Ltd. (AWP) along with its three branches, with an aim to expand in Vancouver. Financial terms of the transaction were not disclosed.

AWP is a distributor of primarily residential roofing systems and related accessories with attractive, innovative and architecturally appealing roofing styles, as well as complete roofing solutions with great value.

The acquisition of AWP together with its three branches in Vancouver, Canada suburbs of Surrey, Kelowna and Burnaby, is a strategic fit for Beacon Roofing and is expected to facilitate its growth through geographical expansion.

Beacon Roofing's growth strategy includes both internal growth and growth through acquisition. On Nov 2012, the company purchased McClure-Johnston, a distributor of residential and commercial roofing products and related accessories for about $64.6 million. Further in Dec 2012, it purchased the assets of Ford Wholesale Co.

Beacon Roofing is also keen on growing internally by opening branches, growing sales with existing customers and introducing new products. During the first nine months of 2014, the company opened 17 new branches, increasing overall branch count by more than 7% from the beginning of the fiscal year.

The company expects the strong demand to continue in the fourth quarter of fiscal 2014, benefiting from its diverse product offering along with its greenfield strategy and lead to sales growth in the range of 7% to 10% for the fourth quarter compared with the 7.4% organic growth in the fourth quarter of 2013. For the full year, Beacon Roofing expects organic sales growth in the range of 4% to 5%.

Beacon Roofing remains on track to open 25 new branches in 2014. These new branches should add 2% organic growth for the year. For 2015 and beyond, Beacon Roofing is planning to open at least 20 branches per year.

The complementary product business will grow in the balance of fiscal 2014, driven by development in new construction and remodeling activity. Commercial business will also expand in the second half, given the number of projects and bids currently in process.

Peabody, MA-based Beacon Roofing is one of the major distributors of residential and non-residential roofing materials as well as complementary building products in the U.S. and Canada, with more than 90% of sales coming from the U.S.

Beacon Roofing currently has a Zacks Rank #5 (Strong Sell). However, some better-ranked stock in the same industry include The Home Depot, Inc. ( HD ), Boise Cascade Company ( BCC ) and KB Home ( KBH ). All these stocks carry a Zacks Rank #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

HOME DEPOT (HD): Free Stock Analysis Report

BEACON ROOFING (BECN): Free Stock Analysis Report

KB HOME (KBH): Free Stock Analysis Report

BOISE CASCADE (BCC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AWP , HD , BCC , KBH , BECN

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

85,117,424
  • $6.78 ▲ 11.88%
77,261,676
  • $17.53 ▲ 1.56%
61,066,548
  • $6.90 ▲ 2.99%
56,847,440
  • $112.65 ▲ 2.96%
52,788,366
  • $7.78 ▲ 1.83%
50,761,400
  • $25.14 ▲ 2.91%
47,781,237
  • $45.35 ▲ 10.18%
45,664,909
  • $7.17 ▲ 2.14%
As of 12/18/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com