C O V E R F E AT U R E
GAME CHANGER The combination of Builders FirstSource and BMC has far-reaching implications for the building material industry. By Ken Clark
uilders FirstSource (BFS) and BMC officially tied the knot on their merger in January, propelling the combined company into uncharted territory. The terms “megamerger” and “blockbuster deal” had already been used to describe earlier BFS and BMC deals that brought ProBuild Holdings and Stock Building Supply into the consolidated picture. So what do you call the creation of a $12 billion player in the building supply business? Two words come to mind: “Game changer.” “I think that’s a proper name for it,” President and CEO Dave Flitman told HBSDealer. “Back when we announced the deal, I began using the word ‘transformative.’ What we’ve brought together here with the number one and number two industry players — it’s never been done before.” More impressive than the size of the merger is the speed with which the two companies have effectively joined forces. The company says it is a year ahead of schedule in achieving its synergies. During its recent second quarter earnings call, BFS reported $36 million in cost savings, so far. The company also raised the goal posts — and is now looking to achieve between $140 million and $160 million in total synergies by the end of 2022. Executives in Dallas point to a number of reasons for the integration’s success to date. Chief among them: management teams that have been there before, specifically in 2015 when BMC and Stock, and BFS and ProBuild went through mega mergers. (See sidebar). The repercussions of the merger are playing out in several ways, both internally and externally throughout the (still) fragmented building supply sector. Here are some of the big transformative themes of the merger.
SEPTEMBER 2021 HARDWARE + BUILDING SUPPLY DEALER