BlueLinx to Acquire Cedar Creek
BlueLinx announced that it has entered into a definitive agreement to acquire Cedar Creek, a leading building products wholesale distributor, a portfolio company of Charlesbank Capital Partners for a purchase price of $413 million on a debt-free, cash-free basis. The purchase price will consist of approximately $345 million in cash and approximately $68 million as the agreed value of the capital leases. The transaction has been unanimously approved by BlueLinx’s Board of Directors and is expected to be completed within 45 days, subject to customary closing conditions and regulatory approvals.
The combination of BlueLinx and Cedar Creek will create a leading building products wholesale distributor with one of the largest product offerings in the building products industry, including over 50,000 branded and private-label SKUs, and a distribution footprint of 70 national locations servicing 40 states. Together with Cedar Creek, BlueLinx will be able to distribute its comprehensive range of structural and specialty products to approximately 15,000 national, regional, and local dealers, as well as specialty distributors, national home centers, industrial, and manufactured housing customers. The transaction will enable the combined entity to serve diverse end markets from new residential and light commercial construction to industrial, as well as residential repair and remodel. BlueLinx and Cedar Creek’s combined revenue was $3.2 billion in 2017 and its pro forma LTM Adjusted EBITDA for 2017 would have been approximately $154 million including at least $50 million of annual cost savings.
“We are pleased to announce the combination of Cedar Creek and BlueLinx,” said Mitch Lewis, President and Chief Executive Officer of BlueLinx. “Cedar Creek’s commitment to organic growth and its customers as well as its track record of successful acquisitions make it an ideal partner for BlueLinx. The combination will significantly enhance our product portfolio by providing greater breadth and depth of building products and services for our customers and suppliers across our markets. This transaction will create a leading U.S. wholesale distributor of building and industrial products, and significantly enhance the value that we can deliver to our customers, as well as our supplier partners, and end-market consumers. With an extensive cache of products, the benefits of our combined technology and a strong footprint East of the Rockies, we will be well-positioned to drive profitable growth for our stakeholders, as we realize the significant strategic and financial benefits of this transaction and expand to additional geographic territories. I look forward to working alongside Alex Averitt, CEO of Cedar Creek, and D. Wayne Trousdale, Chairman at Cedar Creek, who will both become an integral part of our combined Company. I am particularly pleased to welcome Cedar Creek’s highly talented associates as we bring together our two great companies and complementary cultures to create an industry leader.”
“We are pleased to join forces with BlueLinx to provide a wider range of products and services to our valued customers,” said Alex Averitt, Cedar Creek Chief Executive Officer. “We have admired BlueLinx’s resilience and recent performance, as well as its geographic scope and product portfolio, and D. Wayne and I look forward to working closely with Mitch and the BlueLinx management team as we integrate our companies, continue to grow our businesses and create enhanced opportunities for both Cedar Creek and BlueLinx associates. We look forward to our future and are committed to ensuring a seamless transition."
Josh Beer, Managing Director of Charlesbank Capital Partners, said, “This transaction represents a major milestone in Cedar Creek’s storied history of growth and is a terrific outcome for Cedar Creek and BlueLinx. The combination with BlueLinx will create a leading building products distributor that is even stronger – financially, operationally and strategically. We are proud of what Cedar Creek has accomplished over the years in building a culture of excellence while delivering best-in-class service and products to customers. This transaction ensures that Cedar Creek will continue to thrive for the years to come.”
Source: Global News Wire