Despite downturn, ProBuild Holdings to expand
Industrial Distribution staff -- Industrial Distribution, 3/31/2008 6:05:00 AM
ProBuild Holdings plans to stay aggressive on the acquisitions trail despite the housing downturn, CEO Paul Hylbert told the Rocky Mountain News.The Denver-based building materials distributor, the product of a rollup of more than 120 companies, was started in 2006 when a Fidelity Investments spinoff, private equity firm Devonshire Investors, added Tulsa, Okla.-based Hope Lumber to the Strober Organization and Lanoga Corp.
Since then the company has grown from three employees to 160 and posts annual sales of more than $5 billion.
That rapid growth will continue, Hylbert told the newspaper.
"It's been much more logical to find good companies in markets we want to enter, rather than open green-field companies, creating another competitor and taking the years it takes to learn the customers and the markets," he said.
With revenues down 18 percent in 2007, compared with 2006, the company’s top line is ever more dependent on acquisitions.
Since May 2007, ProBuild acquired nine companies, including HD Supply’s lumber business late last year and more recently Jasper Lumber of Jasper, Ga., a pair of New York-based truss manufacturers and Florida-based Granger Lumber-Hardware.
Last year’s $8.5 billion buyout of HD Supply by a trio of private equity firms provided an additional boon for ProBuild, Hylbert added.
"They were a very aggressive acquirer," he said. "So to have them out of the market is very important to us."
And while further acquisitions are more than likely, a move to take the company public is not.
“Fidelity is unlike the private-equity companies with a five- to eight-year timeline, looking to exit the business," Hylbert said. "This is a long-term business for Fidelity and I think they're planning to grow the business and own it forever.”
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