Webb Analytics: After Mega-Deals, LBM Market Shifts Toward Smaller Acquisitions

In a four-week period when Lowe's closed the acquisition of Foundation Building Materials that was announced in August, the answer to the question "What's New in M&A?" centered on 11 far smaller purchases. In those deals:

• Gypsum Management & Supply, which earlier this year became a division of The Home Depot's SRS Distribution, purchased Brown Machinery, a specialist in EIFS, stucco, and insulation with four stores in Oklahoma.

• Another unit of SRS, Heritage Landscape Supply Group, bought World Outdoor Emporium, a two-store operation in the St. Louis market.

• Builders FirstSource improved its door manufacturing capabilities in Nevada by acquiring Rystin Construction and Builder's Door & Trim.

• R.P. Lumber entered Indiana with its purchase of Dye Home Improvement, which has stores in Monon and Monticello.

• RoMac Building Supply took over Thomas Lumber of Orlando, FL.

• Michigan's Preston Feather bought Barden Lumber of Boyne City.

• Golden State Lumber + Showroom expanded in Sacramento, CA, by taking in The Window and Door Shop, based in the capital.

• Sims-Lohman continues to bet on Florida's Gulf Coast, taking over Kay's Prestige Kitchen and Bath in Pensacola and Linn's Prestige Kitchens and Bath in Fort Walton Beach.

• SiteOne Landscape Supply did a pair of deals, taking over Autumn Ridge Stone and Landscape Supply in Holland, MI, as well as Red's Home & Garden in Wilkesboro, NC.

• Costello's Ace Hardware made its biggest growth leap ever by purchasing the 11-store Rommel's Ace Home Center chain, based in Delaware and Maryland.

Among recent store openings, some former Meek's executives have launched Shasta Building Supply in Redding, CA, while Hartville Hardware opened a far bigger version of its Middlefield, OH, store.

Taking over FBM increases Lowe's store count by more than 350 and boosts its effort to be an interiors specialist for pros.

So far this year, Webb Analytics counts 1,752 LBM locations that have been purchased by 53 companies in 85 separate deals. Roughly half that count is made up of gypsum specialists, while roofing specialists account for another third. Only 4% of the deals involved lumberyards or truss facilities.

A total of 169 stores either have opened or are scheduled to open this year. Meanwhile, there have been 60 store closures, often involving hardware stores where the owners plan to retire.