Acquisitions
Beacon is a prime example of this. Growth like Beacon’s generally doesn’t happen organically within one year, especially at large organizations. The company’s revenue soared to $6.8 billion, helped largely by the completion of its $2.6 billion acquisition of Allied Building Products in January 2018. This marked the largest one-year sales percentage spike out of all of the companies on this year’s list.
To find a year-over-year sales percentage increase anywhere near Beacon’s, you’d have to go further down the list to Hammond Lumber. Its revenue soared 54.6% year over year to $252 million, largely due to its acquisition of Ellsworth Builders Supply (No. 80 on last year’s list). This catapulted the company to the No. 25 spot, up from 36 last year.
The next biggest annual sales surge comes from Kodiak Building Partners. The company joined the elite billion-dollar club after its revenue soared 49.8% last year to $1.1 billion. To do this, Kodiak acquired five companies, which enabled it to expand into three states.
View the profile of PS100 newcomer American Construction Source
Perhaps the biggest head turner of the year, however, comes from veritable newcomer American Construction Source (ACS), which was formed to acquire Meek’s Lumber (No. 22 on last year’s leaderboard) in September 2018. The acquisition, along with several others by ACS, gives the company a combined revenue of $566.3 million and enables ACS to make its debut high on the PS100 list at No. 14.
Looking ahead, if the economy cools in the next 18 to 24 months, as some experts predict (see “ProSales 100 Conference: Economic Slowdown Could Be on the Horizon”), and the valuations of attractive companies drop, it could pique the interest of some industry behemoths. In fact, during an M&A panel at the ProSales 100 conference in March, top executives from ACS, BMC, US LBM, and Kodiak Building Partners expressed optimism about their ability to acquire companies within the next 18 to 24 months.
Acquisitions have “impacted our profitability positively,” said David Flitman, president and CEO of BMC, during the panel discussion. “What we look to acquire are companies that bring in unique capabilities that are augmenting our value-added capabilities and services at or above the average profitability of our company today.”
