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Builders FirstSource (BLDR) Buys John's Lumber, Boosts Presence

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Builders FirstSource, Inc. BLDR has acquired a family-owned, leading supplier of lumber and other building materials company - John’s Lumber. The acquisition will improve Builders FirstSource’s product portfolio and expand its reach within Michigan.

Dave Flitman, president and CEO of Builders FirstSource, said, “We will continue to reinvest in our business and pursue accretive tuck-in acquisitions that create value for our business and our customers.”

Found in 1947, John’s Lumber primarily operates in two locations and serves the greater Detroit metropolitan statistical area or MSA - United States’ No. 41 ranked single-family housing market. Notably, it has generated nearly $49 million revenues in the past year.

Acquisitions Aid Builders FirstSource

Acquisitions have been one of the preferred mode of solidifying the company’s presence and product portfolio. On Jan 1, it completed the merger with BMC Stock Holdings — one of the nation’s leading providers of diversified building materials and solutions to new construction builders as well as professional remodelers. BMC’s distinct millwork capability, READY-FRAME offerings and other manufactured products complement Builders FirstSource’s strength in trusses as well as manufactured components, among other offerings. Also, it will now be able to invest more in innovation and develop targeted solutions that will be provided by highly-skilled team members. This enables the company to provide best-in-class service to customers and communities.

In first-quarter 2021, the company generated $4.2 billion of total net sales, up 54.1% from a year ago. The uptick was driven by its merger with BMC and other acquisitions, commodity inflation as well as strong organic growth.

Adjusted earnings also rose 302.5% year over year from a combined pro-forma earnings of 28 cents reported a year ago. Adjusted EBITDA and adjusted EBITDA margin rose a whopping 186.8% and 500 basis points year over year, respectively. Strong demand in the residential housing market, commodity value and disciplined cost management aided the company.

During the period, last year’s acquisitions (excluding the BMC merger) added 2.4% to total net sales. Notably, it expects 2% net sales contribution from the two latest buyouts in 2021.

Shares of this largest supplier of building products, prefabricated components, and value-added services company have gained 197.2% in the past year compared with the industry’s 53.2% rally.

The company — which shares space with Fastenal Company FAST, Lumber Liquidators Holdings, Inc. LL and Beacon Roofing Supply, Inc. BECN in the Zacks Building Products - Retail industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Fastenal Company (FAST): Free Stock Analysis Report

Beacon Roofing Supply, Inc. (BECN): Free Stock Analysis Report

Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report

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