Beacon Roofing Supply Agrees to Acquire Allied for $2.6 Billion
Beacon Roofing Supply Inc. has agreed to acquire Allied Building Products Corp., based in East Rutherford, N.J., for $2.6 billion.
The deal, which isn’t expected to be closed until January 2018, will make Beacon one of the largest wholesale distributors of building materials in North America with pro forma revenue of about $7 billion and 593 locations in all 50 states and six provinces in Canada, plus a combined fleet of nearly 3,000 tractors and straight trucks.
Beacon ranks No. 83 on the Transport Topics Top 100 Private Carriers list with 541 tractors, 1,119 straight trucks and 1,001 trailers.
Allied is a major supplier of wallboard and ceiling tiles, window products, roofing and siding materials and is a business unit of Oldcastle Inc., a company based in Atlanta that is owned by CRH plc in Ireland. Oldcastle ranks No. 72 on the TT100 list of largest private carriers with 601 tractors, 1,758 straight trucks and 1,481 trailers.
Separately, CRH officials said proceeds from the sale of Allied will be used to expand its operations in Europe with the purchase of Fels, a company that produces lime and aggregates and has nine plants in Germany and one each in the Czech Republic and Russia.
For Beacon, the addition of Allied will greatly expand the company’s market share in New York, New Jersey and parts of the upper Midwest, while providing an entry into the market for interior building materials and accelerating growth in other product categories, including siding, windows and doors, decking, trim, waterproofing, insulation and solar panels.
“We are excited to become a significant player in the robust, growing and still-consolidating interior products market,” Paul Isabella, president and CEO of Beacon, said in an Aug. 24 statement. “This is a milestone moment in the long and successful histories of both companies.”
The combined company is expected to realize cost savings of $110 million annually within two years, Beacon officials said.
The investment firm Clayton, Dubilier & Rice, which sold Roofing Supply Group to Beacon in 2015, is contributing $500 million in convertible preferred equity financing along with $2.2 billion in debt financing to fund the purchase of Allied.
“We welcome the opportunity to invest again in Beacon’s future growth and success,” said Nathan Sleeper, a partner at CD&R and a newly appointed director.