Stock Building Supply (SBS) has crafted itself into a leading supplier of lumber and building materials to home builders and contractors. SBS operates about 100 building supply stores (down from 200 prior to a stint in bankruptcy) in about a dozen states and Washington, DC. Products include lumber, plywood, sheetrock, tools, and trusses. It also operates commercial flooring and roofing services. Founded in 1922 by B.B. Benson to sell boards and plaster base, it is owned by Los Angeles-based private equity firm The Gores Group. The building supplies retailer emerged from Chapter 11 bankruptcy protection in mid-2009 and is anxiously awaiting the rebound of the US housing market.
While it waits, SBS has been busy rebuilding its business. The company slashed its stores network in half and exited several states (including Colorado, Minnesota, Montana, Wisconsin, and Wyoming) in an effort to move forward following its time in Chapter 11. It also shed about 2,000 jobs, or roughly 30% its workforce, according to court filings. Further paring down its retail footprint, the company sold its Universal Supply subsidiary, which operated about 10 stores in Delaware, New Jersey, and Pennsylvania, to US LBM Holdings in 2010.
The slimmer SBS plans to boost profits by focusing on about 20 core markets that include: Southern California, the Carolinas, Texas, Utah, Virginia, Georgia, and Washington, D.C., among others. To this end, SBS in late 2012 acquired the assets of Total Building Services Group, an Atlanta-based supplier of structural components and architectural millwork.
In the Houston market, SBS in 2010 completed the acquisition of Bison Building Materials out of bankruptcy. The combination of Bison and SBS created the largest building materials distributor in Houston and helped boost SBS's position in the residential construction market there. The Bison purchase followed the acquisition of another bankrupt company, National Home Centers (NHC), in 2010. NHC is one of the largest building suppliers in Arkansas. SBS purchased NHC to expand its operations ahead of a housing recovery and used part of a $75 million cash infusion from owner The Gores Group to fund the deal. Through its Coleman Floor Company division, SBS expanded its reach in late 2010 in parts of the Northeast (District of Columbia and Baltimore, New Jersey, and Pennsylvania) and Southeast (Greenville, South Carolina) selling installed flooring products to professional home builders and contractors. Coleman Floor plans to expand further in 2011.
In its bid to exit the ailing US market, UK-based Wolseley sold a 51% stake in SBS to The Gores Group in 2009. The Gores Group agreed to invest additional funds in SBS only if the company agreed to undergo a Chapter 11 reorganization. Wolseley retained a 49% holding in the building supplies retailer until late 2011, when Gores Group acquired the remaining shares. – less