Highlights from the first ever LBM Finance & Development mixer

Acquisitions in the Mix

This article is about mergers, acquisitions and the first-ever HBSDealer LBM Finance & Development event.

During the course of writing this short article (just 400 medium-to-wellchosen words), no fewer than two acquisitions hit the news wires. The first involved BTU Do it Center of Las Vegas, N.M., which joined the Nation’s Best family. A few beats later, US LBM acquired Villaume Industries just outside the Twin Cities in Minnesota.

It’s a safe bet that more acquisitions will be reported by HBSDealer.com by

the time this article reaches you in print.

What’s driving these deals? Our elite panel of experts from Day One addressed that question, and many others. (Watch the replay at HBSDealer.com.)

Jon Davis, who has participated in acquisitions on both sides of the business (Davis Lumber, Star Lumber) and now heads up Davis Consulting, says it’s a matter of striking while the iron is hot. “Single-family construction has really exploded,” he said. “You combine that with high commodity prices, which have also risen to levels I’ve never seen, and dealers have had remarkably strong years, both ins sales and profitability. That has

Ken Clark Editor in Chief

Taking care of business: Screen shot from the HBSDealer LBM Finance & Development event. positioned them to where they feel like this is a good time to sell.”

Panelists also pointed to the aging industry of independent lumberyard owners as a driver of deals. Larry Morgan, manager of Mountain States Acquisitions, explained the dynamic in a way that brings to mind the Roman poet Seneca’s classic work, “On the Shortness of Life.”

“My dream seller is someone who is 75 and has had his third heart attack,” he said. “Believe me, those guys are out there. Over the years, I’ve lost three guys who have actually died in the lumber yard. They waited too long to sell.” Recent M&A activity is also fueled by forces affecting buyers, too. Paul Hylbert, the chairman of Kodiak Building Partners (and former CEO of ProBuild Holdings), identified a big one. “One thing that is really unique to this period of time is the inexpensive level of debt,” he said. “Debt is really cheap, and that means you can pay more and still get a good return. That’s something that is really driving buyers.”

The first-ever HBSDealer LBM Finance & Development Event, presented through HBSDealer’s innovative Mix and Mingle platform built for networking, also featured expertise on business valuation, the insurance marketplace and many other aspects of mergers and acquisitions. Check out the replays at HBSDealer.com.

And tell us what you think. HBSD

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