BlueLinx Holdings Inc. (NYSE: BXC), a leading U.S. wholesale distributor of building products, announced today that it has acquired privately-held Vandermeer Forest Products (“Vandermeer”), a premier wholesale distributor of building products, for a purchase price of $67.0 million, which includes $3.6 million for the distribution facility and real estate in Spokane, Washington and $63.4 million for the business. Based on preliminary estimates for September 2022 results, this reflects a purchase price multiple for the business of approximately 3.3x trailing twelve-month adjusted EBITDA. Vandermeer’s trailing twelve-month sales were just over $150 million.
Vandermeer was founded in 1972 and serves more than 250 customers across the Pacific Northwest, Alaska, Hawaii, British Columbia and Alberta from distribution facilities in Kent, Spokane, and Marysville, Washington.
The purchase of Vandermeer was funded through cash on hand and is expected to be immediately accretive to diluted earnings per share on a pre-synergy basis. BlueLinx intends to optimize its treatment of the transaction by making a 338(h)(10) tax election. After funding the acquisition, BlueLinx’s net leverage did not materially change and the company continues to have ample liquidity through a combination of cash on hand and availability under its undrawn revolving credit facility.
“We are excited to welcome Vandermeer’s employees to the BlueLinx team,” said Dwight Gibson, President and CEO of BlueLinx. “This acquisition is well-aligned to our specialty product growth strategy, gives us a meaningful growth platform in the Pacific Northwest, a stated strategic priority, and is consistent with our disciplined approach to capital allocation. With the addition of Vandermeer, we now have a footprint that spans coast-to-coast and serves all 50 states, including direct access to Seattle and Portland, two of the fastest growing metro areas in the United States. Additionally, this acquisition further strengthens our relationships with key strategic suppliers and increases our market penetration in high-value, specialty product categories, specifically siding and engineered wood. Notably, there is no operational overlap, and our team has developed a robust integration plan to drive commercial and operational synergies.”
Gibson continued, “Furthermore, this acquisition demonstrates the rigorous corporate development capabilities that we have established to identify strategic targets, build strong industry relationships, and execute acquisitions that align with our long-term growth strategy. Even after funding this transaction with cash on hand, our financial position remains strong with low net leverage and ample liquidity to support future value creation.”
“We are thrilled to join BlueLinx, a company whose performance-based culture closely aligns to what we have built at Vandermeer over the last 50 years,” said Dave Staudacher, President and CEO of Vandermeer Forest Products. “We believe its scale, private label products, broader specialty product offering, and operating efficiencies make BlueLinx the ideal buyer of Vandermeer and we are excited to become part of this next chapter of growth at BlueLinx.”
First Hill Securities, LLC served as financial advisor and Ryan, Swanson & Cleveland PLLC served as legal advisor to Vandermeer Forest Products in conjunction with this transaction. Kilpatrick Townsend & Stockton LLP served as legal advisor to BlueLinx Holdings Inc.
BLUELINX ACQUISITION OF VANDERMEER CONFERENCE CALL
BlueLinx will host a conference call on October 4, 2022, at 8:30 am Eastern Time, accompanied by a supporting slide presentation, to discuss the Vandermeer acquisition. A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the BlueLinx website at https://investors.bluelinxco.com/events-and-presentations/default.aspx, and a replay of the webcast will be available at the same site shortly after the webcast is complete.
To participate in the live teleconference:
| Domestic Live: | 1-877-407-4018 |
| Passcode: | 13733351 |
| Domestic Replay: | 1-844-512-2921 |
| Passcode: | 13733351 |
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