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Goldman Sachs, Wells Fargo to Provide $450MM ABL for Stock Building Supply, BMC Merger

June 04, 2015, 07:56 AM
Filed Under: Building Supplies

Stock Building Supply Holdings, Inc. and Building Materials Holding Corporation ("BMC"), two leading building materials and solutions providers to professional contractors, today announced the signing of a definitive merger agreement under which the two companies will combine in an all-stock transaction. The combined company is expected to have an implied pro forma enterprise value of $1.5 billion based on Stock Building Supply's closing price on June 2.

The transaction will create a premier provider of lumber, diversified building products and construction services with over $2.7 billion in pro forma 2014 revenues and enhanced product and service offerings. The combined company will have expanded geographic reach in attractive, fast-growing regions across the United States, innovative technology capabilities and deep industry expertise to drive profitable growth and provide leading customer service.

In connection with the transaction, Stock Building Supply and BMC have received a joint commitment from Wells Fargo Bank, N.A. and Goldman Sachs Bank USA, contingent upon the closing of the transaction, to consolidate and upsize existing revolving Asset Based Loan facilities to $450 million for use by the combined company. Available funds will be used to refinance outstanding balances under the current revolving credit facilities, support up to $75 million in letters of credit, and fund transaction costs, general corporate purposes and working capital. Additionally, $250 million of existing BMC Senior Secured Notes maturing in 2018 are expected to remain outstanding. The closing of the transaction is not subject to financing conditions. 

Barclays Capital Inc. is serving as financial advisor to Stock Building Supply, with Hunton & Williams LLP serving as legal counsel. Goldman, Sachs & Co. is serving as financial advisor and Kirkland & Ellis LLP is serving as legal counsel to BMC.

Stock Building Supply operates in 21 metropolitan areas in 14 states primarily in the South and West regions of the United States (as defined by the U.S. Census Bureau). Today, we serve our customers from 68 strategically located facilities. We offer a broad range of products, including lumber and lumber sheet goods, millwork, doors, flooring, windows, structural components, engineered wood products, trusses, wall panels and other exterior products. Our customer base includes production homebuilders, custom homebuilders and remodeling contractors.

BMC, headquartered in Atlanta, Georgia, is a leading provider of residential building products and construction services to professional builders and contractors in the Western United States, Texas and North Carolina. The company has 38 lumber yards, 18 truss manufacturing facilities, 23 millwork operations and 3 Design Centers in 11 of the top 25 single-family construction markets.

To view the entire press release announcing the merger, click here.

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