Beacon Roofing Supply, Inc. BECN has acquired Denver, CO-based residential and commercial roofing and related products distributor, Statewide Wholesale. This marks the third strategic acquisition by the company in December, so far. These buyouts demonstrate Beacon Roofing’s financial and operational capacity to acquire more high-quality companies after the Roofing Supply Group deal in October.
The Statewide Wholesale acquisition is another strategic fit for Beacon Roofing and marks the company’s foray in south Denver, which has a huge scope of commercial and residential development. The addition of Statewide Wholesale to its existing Roof Depot and new branches from Roofing Supply Group gives Beacon Roofing a competitive edge with expanded presence in the fast-growing Denver market. It will help the company better serve customers across the entire Denver metropolitan area.
In mid-December, Beacon Roofing had acquired Roofing & Insulation Supply, a distributor of residential and commercial insulation as well as roofing and related products. The takeover will significantly strengthen Beacon Roofing’s existing insulation business, which has been a very strong complementary product offering by the company for many years. The buyout should also boost the company’s roofing business in key markets. The insulation industry is growing rapidly and the momentum will be kept alive by favorable energy conservation regulatory changes. Both Beacon Roofing and Roofing & Insulation Supply have an overlapping contractor base with great growth opportunities and are well aligned geographically.
Another notable acquisition in December was that of quality exterior building materials distributor, RCI Roofing Supply. The acquisition will broaden the acquirer’s product offering by bolstering its market presence in Omaha through the combination of RCI Roofing with its existing Roof Depot and new RSG branches.
The company will continue to benefit from its acquisitions moving ahead. For fiscal 2016, the company is evaluating potential markets, which fit its strategy of continued expansion for greenfield openings. Beacon Roofing’s branches have a unique marketing plan and mix of products designed to suit their local markets. Moreover, the company will gain from the increase in roofing and re-roofing demand. However, lower capital expenditure, instability in the oil market, and volatile exchange rates remain headwinds for the company.
Beacon Roofing currently holds a Zacks Rank #2 (Hold). Other stocks worth considering in the sector include Tecnoglass Inc. TGLS, The Home Depot, Inc. HD and Builders FirstSource, Inc. BLDR. While Tecnoglass sports a Zacks Rank #1 (Strong Buy), Home Depot and Builders FirstSource hold a Zacks Rank #2 (Buy).
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