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Beacon Roofing Buys RCI Roofing to Bolster Product Offering

Beacon Roofing Supply, Inc.BECN has acquired Omaha, NE-based quality exterior building materials distributor, RCI Roofing Supply. The acquisition, a strategic fit for Beacon Roofing, will broaden its product offering.

Established in 1983, RCI Roofing is a family owned and operated business serving the Omaha metropolitan area and greater Midwest. It currently has branches in Omaha, Kearney and Lincoln, NE; Council Bluffs, IA, and Pueblo, CO.

Post transaction, Beacon Roofing will gain a stronger market presence in Omaha by combining RCI Roofing with its existing Roof Depot and new RSG branches. It will also benefit from the deal as product offerings will be broadened and it will be able to better serve its customers with even more efficient deliveries.

Beacon Roofing has meticulously expanded its business through strategic acquisitions and diversification of its product offerings. On Oct 1, 2015, Beacon Roofing successfully completed its previously announced acquisition of leading roofing products distributor - Roofing Supply Group - in a cash and stock transaction valued at approximately $1.1 billion.

The Roofing Supply Group buyout will strengthen Beacon Roofing's position as the largest publicly traded roofing materials and related products distributor in the U.S., with approximately $3.6 billion in pro forma revenues. With the acquisition, Beacon Roofing significantly expanded its geographic footprint to 359 locations across 45 states, with enhanced presence in the Southern and Western U.S. and the Pacific Northwest.

This follows Beacon Roofing's record fourth-quarter fiscal 2015 (ended Sep 30, 2015) results on Nov 24. Beacon Roofing reported earnings of 75 cents, up 56% year over year. Higher volume and gross margins, partially offset by increased operating expenses due to the incremental costs associated with the acquisitions undertaken and the 32 greenfields opened in the last 24 months, led to the overall improvement. The residential and non-residential roofing materials distributor's record fourth-quarter sales totaled $788 million, up 8% year over year.

In fiscal 2016, Beacon Roofing plans to retain its focus on organic growth as well as on additional greenfields. Nonetheless, it intends remain on track with inorganic growth via acquisitions too. The company projects revenues in the range of $3.8 billion to $4 billion for fiscal 2016. It estimates gross margins in the range of 23%-24% and earnings per share of around $1.80.

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 its sales coming from the U.S.

Beacon Roofing currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the sector are Tile Shop Holdings, Inc. TTS , The Home Depot, Inc. HD and Tecnoglass Inc. TGLS . While Tile Shop Holdings sports a Zacks Rank #1 (Strong Buy), Home Depot and Tecnoglass hold a Zacks Rank #2 (Buy).

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


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

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