Roofing material distributor Beacon Roofing Supply, Inc. BECN has acquired ProCoat Systems, Inc. in a move to expand its product offerings in Denver as well as other regions of the U.S. and Canada. Financial terms of the transaction were not disclosed.
Establish in 1984, ProCoat is a distributor of residential and commercial exterior building materials including stucco, stone, waterproofing and concrete restoration. ProCoat’s current team will remain in place and co-manage the business with Beacon Roofing, post acquisition.
ProCoat’s acquisition is in sync with Beacon Roofing’s strategy to boost profitability for shareholders. The purchase will enable Beacon Roofing to widen its product portfolio across the commercial and residential building materials markets to better serve its customers.
Beacon Roofing has meticulously expanded its business through strategic acquisitions and diversification of its product offering. The company acquired Wholesale Roofing Supply in Oct 2014. The company also acquired Applicators Sales & Service and All Weather Products Ltd. last year to expand geographically. These acquisitions will aid long-term growth.
Beacon Roofing is also keen on growing internally with its greenfield investment strategy by opening branches and growing sales with existing customers. The company surpassed its internal goal of 20 to 25 branches by opening 26 branches in fiscal 2014.
For 2015 and beyond, Beacon Roofing is planning to open at least 20 branches per year. The company’s branches have unique marketing plan and mix of products which will help establishing its presence swiftly and gain local market share.
Based on acquisitions, new branch openings and growth of existing branches, Beacon Roofing guided sales growth in the 6% to 8% range for 2015. The company remains focused on maximizing earnings for the year by executing the fundamentals of business plan, focusing on excellent customer service, sales growth and cost control. However, pricing, demand and weather remain as headwinds for the company.
Peabody, MA-based Beacon Roofing is one of the major distributors of residential and non-residential roofing materials as well as complementary building products in the U.S. and Canada, with more than 90% of sales coming from the U.S.
Beacon Roofing currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader retail-wholesale sector include Tecnoglass Inc. TGLS, Travis Perkins plc TVPKF and Target Corp. TGT. All these stocks carry a Zacks Rank #2 (Buy).
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