Credit: REUTERS/DADO RUVICAdds details on deal, background
Aug 27 (Reuters) - U.S. residential building materials maker Builders FirstSource Inc BLDR.O said on Thursday it has agreed to buy BMC Stock Holdings Inc BMCH.O in an all-stock deal that values the smaller rival at about $2.5 billion.
The announcement comes on the heels of a strong recovery in the U.S. housing market from the crippling economic fallout of coronavirus-induced lockdowns.
U.S. homebuilding accelerated by about 23% in July, the most in nearly four years, up from a 17.3% rise in June, data from the Commerce Department showed last week.
BMC shareholders will receive 1.3125 shares of Builders FirstSource stock for each BMC share, implying a value of $36.63 per BMC share. That represents a nearly 14% premium to BMC's last close of $32.22.
The companies, which manufacture floor trusses, roof trusses, wall panels, stairs, windows and doors, will have a combined market capitalization of $5.44 billion based on Wednesday's close.
Shareholders of Builders FirstSource and BMC will own about 57% and 43% of the new company, respectively, with the deal expected to close in late 2020 or early 2021, the companies said.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Aditya Soni)
((ankit.ajmera@thomsonreuters.com;))
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