Builders FirstSource, the nation’s largest supplier to the homebuilding industry, has purchased two manufacturers of building components for approximately $180.5 million.
The Dallas-based company said this week that it acquired Henderson-based Panel Truss in a roughly $150 million deal on April 1.
Panel Truss designs, engineers, manufactures and sells wood roofing and flooring systems for single family homes and apartments. It made $138 million in revenue last year across its seven locations in Texas, Georgia and South Carolina.
“Additional component capability expands our value-added solution offerings in several key high-growth markets,” Builders FirstSource President and CEO Dave Flitman said in a conference call Tuesday.
Also on April 1, Builders FirstSource purchased Valley Truss, another truss manufacturer with a single location in Boise, Idaho, for approximately $30.5 million. Valley Truss made approximately $26 million in sales in 2021.
“Boise’s active real estate market is seeing an influx of national builders rushing to meet growing local demand, and we are excited to partner with builders to achieve their ambitious goals,” Flitman said.
Builders FirstSource plans to invest about $500 million in mergers and acquisitions this year. The company made seven acquisitions last year for a total of $1.2 billion, including other building materials suppliers and technology companies. The deals followed its nearly $2.5 billion acquisition of North Carolina-based BMC Stock Holdings in 2021.
The company operates 565 locations in 46 states. In the first quarter, it earned $639.6 million, up nearly 271% from a year ago. It posted record revenue of $5.7 billion, which Flitman said was partly due to strong housing demand. The company expects the new acquisitions to boost sales by 5-6% this year.
“In addition to our strong start to the year, we continued to invest prudently in our operations and worked hard to provide exceptional service to our customers in the face of the significant supply chain constraints that persist in our industry,” said Flitman.
Flitman said even with the uncertainty and concern from across the industry, he expects the homebuilding market to continue growing this year.
“Despite ongoing supply chain challenges and rising interest rates, we do not expect a significant housing downturn as we are a much healthier and more prepared industry than the last time we experienced a significant downturn,” he said.
“We continue to believe that the U.S. real estate market is significantly underdeveloped, and while I recognize that rising mortgage rates will likely represent a near-term headwind to satisfying this demand, we continue to see tremendous momentum and growth. long term for the industry.”