In a press release, Beacon Roofing Supply, Inc. announced that it entered into a "definitive merger agreement" to acquire Roofing Supply Group from investment firm Clayton, Dubilier & Rice for cash and stock transaction that is worth about $1.1 billion.
The acquisition allows Beacon, the largest publicly-traded distributor of residential and commercial roofing materials and complementary building products in the U.S., to expand its geographical footprint in key areas in the country.
Roofing Supply, a leading roofing products distributor, provides Beacon with access to 83 branches spread across 24 nations, that includes markets in the "key" Western and Southern area of California, Florida and Texas.
The merger also gives Beacon access to the Pacific Northwest, particularly to Seattle and Spokane, according to the press release.
"RSG complements Beacon geographically, especially in the Southern and Western United States, and RSG's management shares Beacon's belief that success comes from dedication and loyalty to customers and employees," Robert R. Buck, Chairman of Beacon's Board of Directors, said in the statement.
Paul Isabella, president and CEO of Beacon, added that Roofing Supply's established relationship with its customers will benefit Beacon greatly.
"By building on these relationships, Beacon will drive strong growth, bolster our existing customer base and enhance our position across key regions in the South, West and the Pacific Northwest," he said.
Aside from an expanded geographic footprint, Beacon will also be able to offer great customer service and product diversification.
The company will be able to offer a larger fleet of deliveries and service readiness, new customer service initiative, such as e-commerce, and greater scale of residential and commercial business, among others.
Reuters adds that with the recovery of the housing market already in its fourth year, after the financial crisis, U.S. construction suppliers are benefiting from the demand.
Shareholders of Roofing Supply will receive $286 million in cash and $291 million worth of Beacon's common stock. Then approximately $565 million of Roofing Supply's net debt will be refinanced by Beacon.
The transaction is expected to close on October 1, 2015.
