In line with its acquisition strategy,
Beacon Roofing Supply, Inc.
) has inked a deal to acquire leading wholesale distributor Cassady
Pierce Company ("Cassady Pierce"). The terms of the deal were
undisclosed. The transaction is expected to close on May 31,
The acquisition is expected to fortify Beacon Roofing by
expanding its businesses in the Western Pennsylvania region and
help the company in augmenting its portfolio of building
Moreover, the purchase of Cassady Pierce is in line with the
acquisition strategy of Beacon, which is eager to buy market
leaders in different geographic areas with the clear intent of
extending its footprint into potential yet unexplored markets.
About Cassady Pierce
Based in Pittsburgh, Pennsylvania, Cassady Pierce is a leading
distributor of residential and commercial exterior building
products. The company chiefly caters to professional roofer,
remodeling contractor, builder, general contractor and retail home
center markets across Western Pennsylvania, Northern West Virginia
and the Eastern countries of Ohio.
Per its aggressive acquisition strategy, Beacon purchased the
leading roofing distributor Enercon Products in the second-half of
2011, thereby expanding its market presence in Western Canada. In
addition, the company also acquired Nova Scotia based The Roofing
Connection and Colorado based Fowler & Peth, Inc. in 2011.
Credited with a long history of making new acquisitions and
increasing its revenues and operating margin, Beacon now has a
strong balance sheet along with adequate credit facilities, which
support its acquisition strategy.
However, decline in housing starts and weak commercial
construction activity has significantly affected Beacon's
residential and non-residential roofing sales volumes in most
regions. Moreover, the low corporate profits and tight credit
conditions fail to provide any near-term growth drivers for
Currently, we have a long-term Neutral recommendation on Beacon.
The stock retains a short-term Zacks #2 Rank (Buy).
BEACON ROOFING (BECN): Free Stock Analysis
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