US LBM, a distributor national of specialty building materials, announced on October 16 the signing of a definitive agreement for Platinum Equity to acquire a stake in the company from Bain Capital Private Equity.
A company news release said that Bain Capital and Platinum Equity will have equal ownership stakes and joint board governance. US LBM will continue under the leadership of Founder, President and CEO L.T. Gibson and the current management team. Financial terms of the private transaction were not disclosed.
Founded in 2009 with 16 locations in three states, US LBM has grown into a leading distributor of specialty building materials, operating more than 450 locations throughout the country. The company offers a comprehensive portfolio of specialty products, including windows, doors, millwork, wallboard, roofing, siding, engineered components and cabinetry.
"Our strategy of combining our national scale with a strong local market focus has continued to drive significant growth for US LBM … while furthering investment in our people, operations and technology to enhance the value we bring to our suppliers, customers and communities," said Gibson.
"US LBM's national platform, strong supplier relationships, commitment to operational excellence and boosting organic in-market growth continue to make us an acquirer of choice in the building materials industry,” he added.
Gibson also praised Bain Capital’s contributions in allowing the company to grow so quickly, adding that with the addition of Platinum as a third partner, “…their combined operational expertise and experience in the building products space will be a significant asset in driving the growth and expansion of our business."
For its part, Platinum Equity expressed bullishness about its inclusion and offered full-throated support for US LBM’s short and long-term prospects.
"US LBM has built an impressive, diversified business with scale while preserving a vibrant, entrepreneurial spirit," said Jacob Kotzubei, Platinum Equity’s co-president. "In the near term, we think the company's footprint, financial profile, and operating model will allow it to continue growing and strengthening its operations as it navigates the complexities of the current environment.
“We are optimistic about the outlook for new housing over the long term … we look forward to working with the company's leadership group and our partners at Bain Capital to put our financial and operational resources to work," Kotzubei added.
Over the last three years, US LBM says sales and profit have tripled due to an accretive M&A strategy and investments in data and analytics, supply chain optimization, and customer experience. The company says it has successfully leveraged its national scale and operations while diversifying its product mix, expanding its structural components manufacturing capabilities and building deep, local customer relationships.
"We are excited to continue our successful collaboration with L.T. and the talented US LBM team,” said Stephen Thomas, a partner at Bain Capital Private Equity. “As the fundamental outlook for new home construction in the U.S. remains strong, we believe the company is poised to further build out its integrated platform through organic growth initiatives and strategic acquisitions."
In a synergistic move, Platinum Equity said in the release it recently signed a definitive agreement to acquire Cook & Boardman, a leading specialty distributor of commercial door and security integration solutions. Other building material companies in the firm's current portfolio include JELD-WEN's Australasia business; Cabinetworks, a leading US manufacturer and distributor of kitchen and bath cabinets; and PGS, a hard surface floor coverings provider.
US LBM says the transaction is expected to close by the end of Q1 2024 and is subject to customary closing conditions, including requisite regulatory approvals.
RBC Capital Markets LLC, Jefferies and Barclays served as financial advisors, and Kirkland & Ellis LLP as legal advisors to US LBM and Bain Capital. Moelis & Company LLC serves as a financial advisor, Gibson, Dunn & Crutcher LLP provides legal counsel, and Willkie Farr & Gallagher LLP provides debt structuring counsel to Platinum Equity on the investment in US LBM.