LANGLEY, BC - Canada's Hardwoods Distribution Inc. will acquire Rugby Architectural Building Products for U.S. $107 million, creating what it says is North America's largest distributor of hardwood lumber, panel and interior architectural building materials.
Hardwoods Distribution, which will execute the deal by acquiring assets of Rugby Acquisition, LLC, says the acquisition gives it a coast-to-coast U.S. presence, and significantly increases Hardwoods Distribution's access to commercial end-markets.
Based in Concord, New Hampshire, Rugby Architectural distributes "non-structural" architectural grade building products to customers that supply end-products to the commercial market. Rugby also serves industrial, retail, residential and institutional construction end-markets.
Its 560 employees remain in place at Rugby's 31 facilities, which now serve some 22,000 customers across 48 U.S. states. David Hughes remains as Rugby's president; Drew Dickinson continues as COO.
Rugby has been acquiring companies itself lately - 13 since 2009; and most recently Meyer Decorative Surfaces, acquired from Saint Gobain at the end of 2014; and last month Albuquerque Hardwood Lumber Company.
"This is a highly strategic business combination that brings together two successful, growth-oriented companies to create the number one distributor in our industry,". "The Transaction meets our objective of increasing our distribution capability in additional U.S .markets, particularly in the Eastern US," says Hardwoods' CEO Rob Brown. "It also aligns with our 'strengthen commercial' strategy by deepening our presence in the attractive commercial market."
The addition of 31 U.S. facilities to Hardwoods' existing 25 U.S. regional locations creates a national U.S. network. Rugby generated $282 million in sales and gross profit of $12.5 million. About 40 percent of Rugby's sales for were in the Northeast and Southeast U.S. markets.
Hardwoods will now carry Rugby's 36,000 SKUs of branded and unbranded products sourced from 800 suppliers. Hardwoods for further US expansion and growth. Rugby management has successfully completed and integrated 17 acquisitions since 2009, and in doing so has demonstrated its ability to acquire businesses on attractive terms and integrate them successfully. Rugby management has identified a robust pipeline for future acquisitions in the US which Hardwoods believes will enhance its ability to further execute on its acquisition strategy.
"This is a transformational opportunity to move to the forefront of the industry, capitalize on the continued recovery in the US market, and create a platform for significant future growth," said Mr. Brown. "Both Hardwoods and Rugby have impressive track records of profitable growth. I am delighted to welcome Rugby's talented team and look forward to continuing to execute our successful strategies together."
David Hughes, President and CEO of Rugby said, "We are very pleased to be joining Hardwoods' team, and are excited to be part of North America's leading diversified hardwood lumber, panel and architectural building products distribution company. We share an entrepreneurial spirit and intense commitment to customers and suppliers, and see this as a great move for all of our stakeholders."
To fund the acquisition, Hardwoods signed a deal with a syndicate of investment dealers led by Cormark Securities Inc. and including Canaccord Genuity Corp., CIBC World Markets Inc., Mackie Research Corp. and Acumen Capital Finance Partners Ltd..
Hardwoods is one of North America's largest distributors of high-grade hardwood lumber, sheet goods and architectural millwork to the cabinet, moulding, millwork, furniture and specialty wood products industries. The Company current operates a network in North America of 32 distribution centres, as well as 1 sawmill and kiln drying operation.
Rugby Architectural Building Products (www.rugbyabp.com) is a full-line wholesale distributor of specialty building products. Its primary business is the wholesale distribution of non-structural architectural grade building products sold principally to customers who supply end-products for the commercial, industrial, retail, residential and institutional markets.
The company's key product offerings include hardwood plywood, composite panels, solid surface countertops, post-form countertops, high-pressure laminate, interior and exterior doors and millwork, hardwood lumber, cabinet hardware, mouldings and industrial wood coatings. Value-added services include post-form countertop fabrication, custom color matching, laminated panels, cut-to-size panels, edge-banding, custom hardwood molding, hardwood lumber ripping and facing, and interior and exterior door pre-hanging.
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