Platinum Equity to acquire a stake in US LBM from Bain Capital; the companies will have equal ownership stakes and joint board governance, while US LBM will continue under leadership of current CEO and management team

Sample article from our Wood & Building Products

October 16, 2023 (press release) –

US LBM, a leading distributor of specialty building materials in the United States, today announced the signing of a definitive agreement for Platinum Equity to acquire a stake in the company from Bain Capital Private Equity (“Bain Capital”). Bain Capital and Platinum Equity will have equal ownership stakes and joint Board governance. US LBM will continue under the leadership of Founder, President and CEO L.T. Gibson and the current management team. Financial terms of the private transaction were not disclosed.

Founded in 2009 with 16 locations in three states, US LBM has grown into one of the nation’s leading distributors of specialty building materials, operating more than 450 locations throughout the country. The company offers a comprehensive portfolio of specialty products, including windows, doors, millwork, wallboard, roofing, siding, engineered components and cabinetry.

"Our strategy of combining our national scale with a strong local market focus has continued to drive significant growth for US LBM, and Bain Capital’s support has helped accelerate our expansion into several new housing markets while furthering investment in our people, operations and technology to enhance the value we bring to our suppliers, customers and communities," said Gibson. "US LBM's national platform, strong supplier relationships, commitment to operational excellence and boosting organic in-market growth continue to make us an acquirer of choice in the building materials industry. We look forward to working with Platinum and our ongoing partnership with Bain Capital. Their combined operational expertise and experience in the building products space will be a significant asset in driving the growth and expansion of our business."

Platinum Equity Co-President Jacob Kotzubei said he believes in the company’s short and long-term prospects.

“US LBM has built an impressive, diversified business with scale while preserving a vibrant, entrepreneurial spirit,” said Kotzubei. “In the near term, we think the company’s footprint, financial profile, and operating model will allow it to continue growing and strengthening its operations as it navigates the complexities of the current environment. We are optimistic about the outlook for new housing over the long term given the nationwide shortage stemming from years of underbuilding that has created an imbalance in supply and demand. We look forward to working with the company’s leadership group and our partners at Bain Capital to put our financial and operational resources to work.”

Over the last three years, US LBM has approximately tripled sales and profit as a result of an accretive M&A strategy, and investments in data and analytics, supply chain optimization, and customer experience. The company has successfully leveraged its national scale and operations while diversifying its product mix, expanding its structural components manufacturing capabilities and building deep, local customer relationships.

“We are excited to continue our successful collaboration with L.T. and the talented US LBM team.  As the fundamental outlook for new home construction in the U.S. remains strong, we believe the company is poised to further build out its integrated platform through organic growth initiatives and strategic acquisitions,” said Stephen Thomas, a Partner at Bain Capital Private Equity.  “We are proud to have helped US LBM develop a leading national platform and look forward to continuing to support the company in partnership with Platinum, who shares our vision for the growth trajectory of the business.  With our combined resources, US LBM is well-positioned to grow its customer relationships with enhanced product offerings and customer facing technologies," added Olivia Howard, a Partner at Bain Capital Private Equity.

“There are meaningful opportunities to continue building scale nationally and at the local level,” said Platinum Equity Managing Director Nathan Eldridge. “Our plan is to continue investing in core markets with new product offerings or capabilities, while further expanding the company’s reach geographically. We have a lot of experience investing in building products businesses and believe we are well positioned to support US LBM’s growth.”

Platinum Equity recently signed a definitive agreement to acquire Cook & Boardman, a leading specialty distributor of commercial door and security integration solutions. Other building products companies in the firm’s current portfolio include: JELD-WEN’s Australasia business; Cabinetworks, a leading US manufacturer and distributor of kitchen and bath cabinets; and PGS, a provider of hard surface floor coverings.

The US LBM transaction is expected to close by the end of Q1 2024 and is subject to customary closing conditions, including requisite regulatory approvals.

RBC Capital Markets LLC, Jefferies and Barclays are serving as financial advisors, and Kirkland & Ellis LLP is serving as legal advisor, to US LBM and Bain Capital. Moelis & Company LLC is serving as financial advisor, Gibson, Dunn & Crutcher LLP is providing legal counsel, and Willkie Farr & Gallagher LLP is providing debt structuring counsel to Platinum Equity on the investment in US LBM.

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