Builders FirstSource, Inc. BLDR recently announced the acquisition of National Lumber, which is a major independent building materials supplier in New England. The financial terms of the deal have been kept under wraps.
National Lumber, which operates 19 facilities, has more than 700 people across Massachusetts, Connecticut and Rhode Island. This acquisition will drive Builders FirstSource's top line. In 2021, National Lumber sales are anticipated to be nearly $440 million.
Dave Flitman, president and CEO of Builders FirstSource, said, “The company’s diverse building materials and service offerings, which include prefabricated components to millwork and their strong R&R mix, will add even more depth to the value-added solutions Builders FirstSource customers rely on.”
Acquisitions Continue to Drive Growth
Acquisitions are an important part of Builders FirstSource's growth strategy to supplement its organic growth and expand extensively across vast geographic boundaries. On Sep 1, 2021, the company acquired California TrusFrame for $193.4 million. The company is optimistic in this regard, as the acquisition is likely to pave the path for value addition and provide access to new customers. During the third quarter of 2021, acquisitions contributed to net sales growth of 8%.
On Aug 17, 2021, Builders FirstSource completed the buyout of WTS Paradigm, LLC. WTS Paradigm is a software solutions and services provider for the building products industry. On Jul 1, Builders FirstSource acquired Alliance Lumber, thereby expanding the company’s reach in Arizona and other fastest-growing areas of the country.
On May 3, Builders FirstSource acquired a family-owned leading supplier of lumber and other building materials company — John’s Lumber. The acquisition enhanced Builders FirstSource’s product portfolio and expanded its reach within Michigan.
On Jan 1, 2021, it completed an all-stock merger transaction with BMC. The buyout of BMC will help it increase its geographical reach in a highly fragmented industry, enhance value-added offerings and generate a higher level of free cash flow to invest in growth. Before the BMC merger, the company integrated 43 acquisitions since 1998.
In the past six months, shares of the Zacks Rank #1 (Strong Buy) company have gained 91.6%, compared with the industry’s rally of 30.1%. Along with strategic acquisitions, the company has been benefiting from cost synergies, digital solutions, robust housing and repair & remodeling activities.
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Other Key Picks
Beazer Homes USA, Inc. BZH currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and sustained strength in the housing market. You can see the complete list of today’s Zacks #1 Rank stocks here.
Beazer Homes has gained 48% over the past year. Its earnings are expected to grow 23.7% in fiscal 2022.
Quanta Services, Inc. PWR currently carries a Zacks Rank #2 (Buy). Based in Houston, TX, Quanta is gaining from a three-pronged growth strategy focused on timely delivery of projects to exceed customer expectation; leverage on core business to expand in complementary adjacent service lines and continuation of exploring new service lines. Overall, the company’s engineering and project management capabilities allow it to capitalize on market trends that are currently skewed toward engineering, procurement and construction or EPC model.
Quanta has gained 43.1% over the past year. Its earnings are expected to improve by 28.3% in 2022.
United Rentals, Inc. URI currently carries a Zacks Rank #2. Based in Stamford, CT, this company is the largest equipment rental company in the world. It has been benefiting from broad-based growth across the company’s verticals, with persistent growth opportunities for certain non-residential verticals including data center, healthcare and warehouse projects.
United Rentals shares have gained 26.6% over the past year. Its earnings are expected to grow 21.3% in 2022.
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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.
