Beacon Roofing Supply, Inc., the largest publicly-traded distributor of residential and commercial roofing materials and complementary building products in the United States, today announced that it has entered into a definitive merger agreement to acquire Roofing Supply Group, a leading roofing products distributor owned by investment firm Clayton, Dubilier & Rice, in a cash and stock transaction valued at approximately $1.1 billion.
Beacon shares surged as much as 16 percent, the biggest intraday move since October 2008. They were up 11 percent to $33.31 at 9:38 a.m. in New York. They had risen 8.2 percent this year through Friday, reports BloomburgBusiness.
In a press release Monday, Beacon Roofing Supply said that under the terms of the agreement, RSG shareholders will receive approximately $286 million in cash and $291 million of Beacon common stock, and Beacon will refinance approximately $565 million of RSG’s net debt. Beacon will fund the cash portion of the purchase price through a new ABL Revolver, Term Loan B and a senior unsecured bond offering. The transaction is targeted to close on October 1, 2015.
Reuters reports the deal will increase Beacon’s revenue to about $3.7 billion and give the company greater access to 45 states and six provinces across Canada, it said. Beacon reported revenue of $2.33 billion in 2014.
The acquisition of Roofing Supply, which has presence in 24 U.S. states, provides Beacon access to the Pacific Northwest, Reuters added. Â The deal will boost Beacon’s presence in California by 75 percent and in Texas and Florida by as much as 50 percent, the company said.