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Component Manufacturing dverti$ dverti $ er
Don’t Forget! You Saw it in the
Adverti$$er
August 2021 #13265 Page #106
Giant on the Prowl: What BFS’ IT Investment, Other Recent Moves Mean for LBM Craig Webb President, Webb Analytics
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f deeds matter more than words, then three acts in recent weeks by Builders FirstSource (BFS) have revealed much about how America’s biggest pro LBM operation intends to operate.
That trio of moves saw BFS acquire a software company for nine times its annual revenue, pay $400 million for a powerhouse operation in Phoenix that generates $330 million in annual sales, and sell 21 gypsum specialty yards to ABC Supply’s drywall specialty division. Of those, the $450 million acquisition of WTS Paradigm caused the biggest short-term confusion—why buy a software company when you can just rent its products? Because BFS plans to employ a slew of tech advances provided by WTS to do construction supply in a more advanced way. The move ups the pressure on all other LBM operations to follow suit. Start with manufacturing. WTS is best known for writing code used by window and door manufacturers to manage their production.* Those are businesses in which mass production occurs on a custom-order basis. BFS believes that what WTS has learned can apply not only to those product lines (and BFS makes windows) but to other materials, too. “What we see with Paradigm is to take their capability—which is fairly narrow in terms of their product focus around millwork—and expand it two ways,” BFS CEO David Flitman said in a recent interview with investor and Seeking Alpha columnist Bradley Guichard. “... Through the course of time, we see the opportunity to take that same capability well beyond millwork into other product categories at the highest level.” Continued next page
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