BFS Acquires Industry Software Developer Paradigm
Builders FirstSource (BFS) entered a definitive agreement to acquire WTS Paradigm, LLC, a software solutions and services provider for the building products industry, in a cash transaction valued at $450 million. Paradigm serves hundreds of customers, including manufacturers, retailers, dealers, builders, and remodelers, and the company is expected to generate revenue of approximately $50 million in 2021.
BFS said the acquisition is an “important step forward” in its strategy to invest in innovative digital solutions that will help customers build more efficiently.
“Home construction lags far behind other major industries in the adoption of modern tools that can save time and money and reduce waste,” BFS president and CEO Dave Flitman said in a prepared statement. “Our unmatched scale, industry relationships, and technical knowledge uniquely position us to increase the adoption of digital solutions across a fragmented customer base. Paradigm’s powerful technology platform provides us with an enhanced customer value proposition, helping fuel long-term growth by establishing a leadership position in digital solutions for homebuilders.”
Middleton, Wis.-based Paradigm specializes in technology, software development, and consulting services that help manufacturers, retailers, and builders in the building product industry boost sales, reduce costs, and become more efficient. The company offers customers a simplified process of configuring, estimating, and manufacturing products with many options, such as windows and doors.
The acquisition will enhance BFS’s digital capabilities and align with the company’s broader vision to provide digital solutions that solve pain points at every step in the homebuilding process, according to the dealer. BFS said it plans to continue to invest in the core Paradigm Omni configuration technology, which also powers Paradigm Omni for Homebuilders, a virtual design technology that aims to reduce friction and improve efficiency.
“I have always cared deeply about the success of our employees, our customers, and this company,” Nathan Herbst, Paradigm founder and CEO, said in a news release. “We will continue to be a great partner to all our existing customers. Becoming a part of Builders FirstSource will unlock new opportunities for our employees, introduce us to new customers, and allow us to accelerate the adoption and deployment of our software to solve our customers’ complex business problems.”
The current average residential construction project involves over 60 material suppliers, 100 subcontractors, and many other service providers. With such a complex process, digital technologies offer the possibility of improving efficiency for each step of a project. BFS said acquiring Paradigm will provide tools to make it easier for customers to do business with the dealer. The company said establishing digital solutions leadership for the homebuilding industry is expected to drive both growth and efficiency for BFS’s distribution network by enabling the company to efficiently align with customers and better support the entire building process.
After the transaction closes, Paradigm will operate as an independent subsidiary of Builders FirstSource.
Dallas-based BFS operates in 40 states with approximately 550 locations and has a market presence in 47 of the top 50 and 86 of the top 100 MSAs. The company provides value-added products such as roof and floor trusses, wall panels, stairs, vinyl windows, custom millwork and pre-hung doors. BFS also distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other building products. The dealer has expanded recently through its mega-merger with BMC Holdings and its acquisitions of Michigan-based John’s Lumber and Arizona-based Cornerstone Building Alliance.