Texas based largest nationwide supplier of building products, and readymade components for residential homes, Builders FirstSource Inc has agreed to buy BMC Stock Holdings Inc in an all-stock deal worth $2.5 billion. BMC is also a leading provider of building materials headquartered in North Carolina.
The deal is a result of strong recovery in the US housing market from the coronavirus economic crisis, which went up by 23% in June (highest in four year) and 17.3% in June. Both companies combined will become a premier supplier in building materials and services, and estimated sales of $11 billion. In addition to this, the combined company will have abundant resources to expand it's geographic footprint, increase sales, and innovation.
BMC shareholders will receive a premium of almost 14% as for every stock of BMC they will receive 1.3125 shares of Builders FirstSource stock. Builders FirstSource shareholders will hold 57% whereas BMC shareholders will hold 43% of the new company. The combined new company will retain the name Builders FristSource.
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