RSG Roofing

News & Info

"Roofing Supply Group continues to grow nationwide. In addition to the core product offering, each branch meets the needs of its local customers with unique products."

RSG News

BEACON ROOFING SUPPLY TO ACQUIRE ROOFING SUPPLY GROUP

BEACON ROOFING SUPPLY TO ACQUIRE ROOFING SUPPLY GROUP FROM CLAYTON, DUBILIER & RICE FOR $1.1 BILLION IN CASH AND STOCK

Combined Company Expected to Generate Approximately $3.7 Billion in Revenue Across 356 Locations

Significantly Expands Beacon’s Geographic Footprint in Southern and Western United States

$50 Million in Expected Annual Run-Rate Synergies

Immediately Accretive to Adjusted EPS and Provides Significant Tax Attributes

HERNDON, VA and DALLAS, TX – July 27, 2015 – Beacon Roofing Supply, Inc. (Nasdaq: BECN) (“Beacon”), the largest publicly-traded distributor of residential and commercial roofing materials and complementary building products in the United States, today announced that it has entered into a definitive merger agreement to acquire Roofing Supply Group (“RSG”), a leading roofing products distributor owned by investment firm Clayton, Dubilier & Rice (“CD&R”), in a cash and stock transaction valued at approximately $1.1 billion.

Under the terms of the agreement, RSG shareholders will receive approximately $286 million in cash and $291 million of Beacon common stock, and Beacon will refinance approximately $565 million of RSG’s net debt. Beacon will fund the cash portion of the purchase price through a new ABL Revolver, Term Loan B and a senior unsecured bond offering. The transaction is targeted to close on October 1, 2015.

Headquartered in Dallas, Texas, RSG distributes roofing supplies and related materials from 83 locations across 24 states, including the key Western and Southern markets of California, Florida and Texas. The acquisition also brings Beacon to the Pacific Northwest with branches in Seattle and Spokane. As a result of the acquisition, Beacon will grow to approximately $3.7 billion in revenues and have 356 branches in 45 states and six provinces across Canada. In addition to benefitting from an expanded geographic footprint, Beacon will be able to provide greater customer service through more diversified product offerings across its newly-acquired and existing branches. The transaction is expected to be immediately accretive to adjusted earnings per share (“EPS”) and to generate annual run-rate synergies of approximately $50 million. The tax-efficient transaction structure is expected to enable Beacon to retain approximately $130 million in net operating losses, existing intangible deductions of approximately $190 million and transaction-related deductions of approximately $50 million.

Robert R. Buck, Chairman of Beacon’s Board of Directors, emphasized the strategic fit of the RSG acquisition and the compatibility of the two companies and stated: “We long have believed that a combination of Beacon and RSG would be tremendously beneficial to our shareholders, customers and employees. RSG complements Beacon geographically, especially in the Southern and Western United States, and RSG’s management shares Beacon’s belief that success comes from dedication and loyalty to customers and employees. We are pleased that CD&R will become a major shareholder. This is a momentous event for these two great companies and for the future of the roofing distribution industry.”

Paul Isabella, Beacon’s President and Chief Executive Officer, added: “I am thrilled to welcome RSG to the Beacon family. Our company will benefit greatly by joining forces with RSG’s talented and experienced employees who have developed strong and enduring relationships with customers in their local communities. By building on these relationships, Beacon will drive strong growth, bolster our existing customer base and enhance our position across key regions in the South, West and the Pacific Northwest. The acquisition also adds scale to our commercial business and expands our capabilities within our complementary businesses. This acquisition is a milestone in the long and successful history of Beacon.”

Peter Arvan, RSG CEO, said: “By joining forces with Beacon, we create a market-leading enterprise with exceptional prospects, bring together two highly experienced and proven management teams, and add capabilities to provide our valued customers with the highest levels of service. It’s a great moment for RSG, representing a strong validation of the business the team has built, as well as a compelling opportunity to capitalize on the strengths of both companies.”

CD&R Partner Nathan Sleeper said: “We are very excited about this merger and believe that, together, RSG and Beacon will have a very strong foundation for long-term value creation. We look forward to playing a constructive role in helping to realize the full benefits of this strategic combination.”

 

Strategic and Financial Benefits of the Transaction

  • Expanded Geographic Footprint: The combined company will operate 356 locations with an expanded distribution platform that affords greater access to the less seasonally-sensitive Southern and Western U.S markets. The acquisition also provides Beacon with an entry into the Pacific Northwest, as well as additional branches in highly attractive, dense markets including California, Florida and Texas.
  • Greater Product Diversification and Customer Service: The transaction strengthens Beacon’s position as the largest public roofing materials and related products distributor in the U.S. with revenues of approximately $3.7 billion. Beacon will be better-positioned to serve existing and new customers with a larger fleet for deliveries and service readiness, greater scale of residential and commercial business, increased offering of complementary building products across RSG’s locations, enhanced engineering capabilities, and greater financial resources to develop and implement new customer service initiatives, such as e-commerce.
  • Aligned Growth Strategies: Both Beacon and RSG employ “Greenfield” growth strategies to expand branch count and geographical reach, and the respective organizations have benefited from this strategy. In total, the companies have opened 72 Greenfields since 2012, which will contribute to an enhanced organic growth rate in future years. Both companies have grown through a similar approach to acquisitions and a focus on consistent improvement in organic growth.
  • Immediately Accretive to Beacon’s Adjusted Earnings per Share: Beacon expects the acquisition of RSG will be immediately accretive to adjusted earnings per share and meaningfully more accretive thereafter.
  • Significant Cost Synergies Expected: Beacon’s acquisition of RSG is expected to generate approximately $50 million in annual run-rate synergies. Run-rate cost savings represent approximately four percent of RSG’s 2015 sales and are consistent with similar industry mergers.
  • Tax-Efficient Structure: The acquisition, which is being structured as a reorganization to achieve optimal tax treatment, is expected to enable the combined company to retain all advantageous tax attributes associated with RSG, including approximately $130 million in net operating losses, existing intangible deductions of approximately $190 million and transaction-related deductions of approximately $50 million.
  • Strong Financial Profile: The combined company will enjoy ample liquidity, with approximately $350 million of available capital. Following the close, rapid de-levering is expected to result from the realization of cost savings, earnings expansion, strong cash flow generation and low ongoing capital expenditures. The capital structure will take advantage of the current low interest rate environment and establish a low weighted average cost of debt.

 

Financing and Approvals

The transaction is targeted to close on October 1, 2015 and is subject to the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as well as other customary closing conditions.

Beacon will finance the transaction with a new ABL Revolver, Term Loan B and a senior unsecured bond offering.

Management and Board

Following completion of the transaction, Mr. Isabella will continue to serve as President and Chief Executive Officer of the combined company, and Mr. Buck will remain Chairman of the Board of Directors. Mr. Arvan will continue to manage the RSG business and report to Mr. Isabella. Philip Knisely, Chairman of RSG and an Advisor to CD&R Funds, and Mr. Sleeper will join the Board of Directors.

Advisors

Citi is serving as financial advisor to Beacon and Sidley Austin LLP and Schiff Hardin LLP are serving as its legal advisors. Deutsche Bank Securities Inc. and Goldman, Sachs & Co. acted as financial advisors to RSG, and Debevoise & Plimpton LLP is serving as legal advisor to RSG.

Citi and Wells Fargo are acting as Joint Lead Arrangers on the debt financing.

Conference Call and Presentation

Beacon will host a conference call to discuss the transaction today, July 27, 2015, at 8:00 a.m. Eastern Daylight Time (EDT). The live webcast of the call, along with a webcast replay after the call, can be accessed at http://ir.beaconroofingsupply.com/events.cfm (the “Events & Presentations” page of the “Investor Relations” section of the Company’s web site). There will be a slide presentation available on that page of the website as well. For those unable to connect to the Internet or who may wish to ask questions, the conference call dial-in number is 844-298-9821 (toll-free) or 234-386-2869 (international). To assure timely access, call participants should call in before 8:00 a.m. EDT.

About Beacon Roofing Supply, Inc.

Founded in 1928, Beacon Roofing Supply, Inc. (NASDAQ: BECN) is the largest publicly traded distributor of residential and commercial roofing materials and complementary building products, operating 273 branches throughout 42 states in the U.S. and six provinces in Canada. In fiscal 2014, Beacon had sales of $2.3 billion. The company employs more than 3,000 associates. To learn more about Beacon and its family of regional brands, please visit www.becn.com.

About Roofing Supply Group

A portfolio company of Clayton, Dubilier & Rice, LLC, Roofing Supply Group, LLC (“RSG”) is headquartered in Dallas, Texas, and is one of the largest wholesale distributors of roofing supplies and related materials in the United States. Through its network of more than 83 locations in 24 states nationwide, RSG provides one-step distribution services from roofing product manufacturers to roofing contractors and homebuilders. Each branch carries a complete line of roofing products for residential and commercial roofing, including composition asphalt shingles, underlayment and associated ancillary products.

About Clayton, Dubilier & Rice

Founded in 1978, Clayton, Dubilier & Rice is an investment firm with a strategy predicated on producing financial returns through building stronger, more profitable businesses. Since inception, CD&R has managed the investment of more than $21 billion in 65 businesses with an aggregate transaction value of approximately $100 billion. To learn more about CD&R, please visit www.cdr-inc.com.

Forward-Looking Statements

This release contains information about management’s view of Beacon’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, those set forth in the “Risk Factors” section of Beacon’s latest Form 10-K. In addition, numerous factors could cause actual results with respect to the proposed transaction to differ materially from those in the forward-looking statements, including without limitation, the possibility that the expected synergies, cost savings and tax efficiencies from the proposed transaction will not be realized, or will not be realized within the expected time period; the risk that the Beacon and RSG businesses will not be integrated successfully; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule contemplated by the parties; disruption from the proposed transaction making it more difficult to maintain business and operational relationships; the risk of customer attrition; the possibility that the proposed transaction does not close, including, but not limited to, due to the failure to satisfy the closing conditions; and the ability to obtain the debt financing contemplated to fund the cash portion of the transaction consideration and the terms of such financing. The forward-looking statements included in this press release represent Beacon’s views as of the date of this press release and these views could change. However, while Beacon may elect to update these forward-looking statements at some point, Beacon specifically disclaims any obligation to do so, other than as required by federal securities laws. These forward-looking statements should not be relied upon as representing Beacon’s views as of any date subsequent to the date of this press release.

This release does not constitute an offer of any securities for sale.

Contacts

Beacon Roofing Supply

Joseph Nowicki

Executive Vice President & Chief Financial Officer

(571) 323-3940

jnowicki@becn.com

 

Roofing Supply Group

Troy Draper

(214) 956-5147

 

CD&R

Tom Franco / Dan Jacobs

(212) 407-5200

 

Media

Nick Lamplough

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

BECN-RSG Press Release


Acquisition of Roofing Supply Group – Investor Presentation

Clink on link below.

Investor Presentation


Roofing Supply Group Continues Expansion with New Branches in Georgia, Virginia, Florida and Nebraska

Dallas, TX, July 21, 2015

Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has continued its expansion with the opening five new locations in Savannah, Georgia; Leesburg, Florida; Sarasota, Florida; Richmond, Virginia; and Lincoln, Nebraska. These five new locations build on an already strong RSG presence in each of these states.

Branch Managers for the new locations are: Savannah, John Saunders; Leesburg Andy McNerney; Sarasota, Donna Glisson; Richmond, Ed Palcak and Lincoln, Mike Kampschnieder.

Tim Perryman and Mike Lyle, Division SVP’s commented, “We are excited about the addition of the new branches to serve our customers along with our existing branches in these markets. The new teams are ready to deliver outstanding service and quality products to both our existing and new customers.”

Pete Arvan, CEO stated, “The continued expansion of our branch network is one of many exciting things going on at RSG. I’m really happy about what these branches mean to our team at RSG, our customers and the local communities.”

These openings align strategically with RSG’s overall growth initiative which includes organic growth, opening new locations and potential acquisitions. With these new locations RSG now operates 83 branches.

 

About Roofing Supply Group

A portfolio company of Clayton, Dubilier & Rice, LLC, Roofing Supply Group, LLC (“RSG”) is headquartered in Dallas, Texas, and is one of the largest wholesale distributors of roofing supplies and related materials in the United States. Through its network of more than 80 locations in 24 states nationwide, RSG provides one-step distribution services from roofing product manufacturers to roofing contractors and homebuilders. Each branch carries a complete line of roofing products for residential and commercial roofing, including composition asphalt shingles, underlayment and associated ancillary products. For more information regarding Greenfields & Acquisitions, please contact Jeff Clay at jclay@rsgroof.com | 214.956.5184 – VP Strategic Planning & Corporate Development.

 About Clayton, Dubilier & Rice

Founded in 1978, Clayton, Dubilier & Rice is a private equity firm with an investment strategy predicated on producing financial returns through building stronger, more profitable businesses. The Firm’s partners and advisors include a combination of skilled investment decision-makers and seasoned corporate leaders from major global enterprises. Since inception, CD&R has managed the investment of more than $18 billion in 56 businesses with an aggregate transaction value of approximately $90 billion. The Firm has offices in New York and London. For more information, please visit http://www.cdr-inc.com/.


Roofing Supply Group Continues Expansion with New Branches in Houston TX. and Provo UT.

Dallas, TX, Feb 18, 2015

Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has continued its expansion with the opening of two new locations in Katy, Texas and Provo, Utah. These two new locations build on an already strong RSG presence in the Salt Lake City and Houston markets. The Katy Branch along with branches in the Woodlands, Houston and Clear Lake give RSG the unique ability to service the entire Houston market.

The Katy branch will be led by District Manager Damien Katzenmeyer and Operations Manager J.P. Johnson. The Provo location will be led by Market Manager Ron Pensari and Operations Manager Casey Fisher.

Jeff Willis, Regional SVP commented, “I am thrilled about the addition of the Provo branch to serve our customers along with our existing Salt Lake City and Ogden Branches. The new team in Provo is fired up about delivering outstanding service and quality products to both our existing and new customers”

Pete Arvan, CEO stated, “The continued expansion of our branch footprint is one of many exciting things going on at RSG. I’m really happy about what these branches mean to our team at RSG, our customers and the local communities.”

These openings align strategically with RSG’s overall growth initiative which includes organic growth, opening new locations and potential acquisitions.


Roofing Supply Group Expands with New Branches in Greenville and Mobile

Dallas, TX, Sept 30, 2014

 Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has continued its expansion with the opening of two new locations in Greenville, South Carolina and Mobile, Alabama. These locations will strategically position RSG to better serve customers in both markets.

The Greenville location, part of the Southeast region, will be led by Walter Fulmer as the Branch Manager. Mobile, in the Southwest Region, will be led by JJ Fountain as Branch Manager after relocating from Atlanta where he previously served as Branch Manager.

In a joint statement, Geoff Craft, SVP Southwest and Tim Perryman, SVP Southeast commented, “We’re excited about these branches and the opportunity to serve new markets.  We will continue RSG’s commitment to our customers by providing outstanding service and quality products.” The opening of these new branches aligns strategically with RSG’s overall expansion initiative which includes organic growth, opening of new locations and potential acquisitions. This marks the 13th and 14th new locations for RSG in the past year.



Roofing Supply Group Expands again with New Branches in Houston and Baton Rouge

Dallas, TX, July 30, 2014

Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has continued its expansion with the opening of two new locations in The Woodlands, Texas (North Houston Area) and Baton Rouge, Louisiana. These two new locations will strategically position RSG to better serve customers in both markets.

The Woodlands branch will be led by District Manager Damien Katzenmeyer and the Baton Rouge location will be led by Branch Manager Bobby Freedman. Geoff Craft is the Regional Senior Vice President in the Southwest Region and will have responsibility for both of these locations. These openings represent the 16th and 17th branch locations in the Region.

Craft commented, “I am excited about the addition of these two new branches. Expanding our footprint is a top priority as we stay focused on delivering outstanding service and quality products.”

These openings align strategically with RSG’s overall expansion initiative which includes organic growth, opening of new locations and potential acquisitions. This marks the 6th and 7th new locations for RSG in 2014.


Roofing Supply Group Expands with the addition of branches in the Sacramento, Ca. and Seattle, Wash. markets

Dallas, TX, July 15, 2014

  Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has continued its expansion with the opening of 2 new locations on the West Coast in McClellan Park, California (Sacramento Area) and Woodinville, Washington. (Seattle area) These 2 new locations will strategically position RSG to better serve customers in both markets.

The McClellan Park location will be led by Matt Disantis who assumes responsibility along with the existing Sacramento location where he has served as Branch Manager. Arik Moe will lead the Woodinville location as the Operations Manager. Richard Oliva is the Regional Senior Vice President in the West and will have responsibility for both of these locations. These opening represent the 18th and 19th branch in the West Region.

Oliva said, “We are excited about the two new branches, which expands our footprint in California and Washington. It is great to see the super teams we are building, that will continue RSG’s commitment to our customers by providing outstanding service and quality products.”

The opening of this latest branch aligns strategically with RSG’s overall expansion initiative which includes organic growth, opening of new locations and potential acquisitions. This marks the 12th and 13th new locations for RSG in the last year.


Roofing Supply Group Expands in the Dallas/Fort Worth Market with Third Location in Plano

Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has opened a new location in Plano, TX.   This new location, along with existing branches in Dallas and Fort Worth, will strategically position RSG to better serve the DFW market as a whole, including the counties of Collin, Denton & Hunt.

 

The Plano location will be led by Mark Holdorf, a 23-year veteran in the roofing industry, 15 of those years with RSG, who brings experience in both customer service and product knowledge.  Mr. Holdorf will report directly to Frank Perella, Dallas/Fort Worth Roofing Supply branch manager, who will oversee this new location. The team is committed to continue the unsurpassed service and support to local roofing contractors and homebuilders.  This location is the 13th branch in the Southwest Region under the direction of Geoff Craft, Regional Senior Vice President.

Read More


Roofing Supply Group Expands in the Southeast with the Opening of Second Location in the Virginia Market

Dallas, TX, May 13, 2013

Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has opened a new location in Williamsburg, Virginia.  This location is the company’s second operation in the Hampton Roads area, which includes Virginia Beach, Norfolk and Newport News.  This expansion will allow RSG to better serve a larger footprint in the Virginia market as a whole.

Read More


Roofing Supply Group expands in the Rockies with the opening of a satellite location in Colorado Springs, CO

Dallas, TX, May 10, 2013

Roofing Supply Group, LLC (“RSG”), a national leader in the wholesale distribution of roofing supplies and related materials, announced today that it has opened a new satellite location in Colorado Springs, Colorado.  In addition to Colorado Springs, this location will service surrounding areas such as Pueblo, Cañon City and Woodland Park.

Read More


SUBSCRIBE

for Updates and Specials

  • This field is for validation purposes and should be left unchanged.

Search Locations