It appears that the summer of 2005 will be remembered as the summer of "the big deal" in the commercial roofing industry.

Another Crossover

We announced in the July issue of Roofing Contractor that BFS Diversified Products LLC, the parent organization of Firestone Building Products Co. had acquired Copper Sales Inc. This marks yet another major product group for the truly diversified Firestone. From its base of EPDM roofing systems, this growth-oriented enterprise expanded vertically with the addition of polyiso roof insulation, and broadened its low-slope offerings to include built-up and modified roofing systems. This deal puts Firestone in a new strata altogether.

The acquisition of Copper Sales and its UNA-CLAD brand marks a significant move by a manufacturer of conventional low-slope roofing systems. While this is not the first acquisition of a metal roofing manufacturer by a conventional roofing systems company, it is certainly the most significant deal of this type. The metal roofing industry continues to grow at a rapid clip and changes like this may become the rule rather than the exception. If this play works out, it may mark the beginning of the consolidation of an otherwise fairly fragmented metal roof manufacturing industry.

Also worthy of note in the announcement is the reference to the "environmentally friendly" nature of metal. Firestone is correct to continue in this direction, and commercial roofing contractors would do well to take note. Our industry's clientele are on this path and will continue to seek out materials that are more energy-efficient and sustainable as a way of keeping their costs and downstream liabilities low.

Speaking of Consolidation

Roofing Contractor was the first to report the formation of General Roofing, the commercial roof-contracting industry's first consolidation, in the cover story of our October 1998 issue. In our February 2005 issue we reported on the emergence of generalRoofing from Chapter 11 reorganization.

Now we report that Tecta America Inc. has acquired the majority of the assets and operating units of generalRoofing (see page 12). This means there is one less mega-commercial roofing contractor in the country and there is one that now stands to be the largest roofing contractor this nation has ever seen.

According to Tecta president and CEO, Mark Santacrose, the now larger firm will have 21 "stand-alone" roofing companies with just under 50 operating entities and nearly 3,000 employees with a potential annual run rate over $375 million.

The several consolidations in the commercial roofing industry have been mostly unsuccessful, but the younger Tecta America has managed to survive and grow. The key difference in the two organizations is the basic structure. generalRoofing had moved to a central command and control type operation while Tecta began-and has remained-decentralized with strong local management, including many of the former company owners and managers.

So will bigger be better? Santacrose thinks so. Tecta believes that the people and operating units that survived the cuts at generalRoofing are viable and valuable. Only the CEI of Michigan groups were not part of the acquisition. According to Bart Roggensack, president and CEO of the former generalRoofing, members of the Cook family (former owners of CEI Michigan) are negotiating to resume ownership of those entities. Santacrose indicated these were the only operating units that were not a good fit for Tecta.

So how significant is this to the commercial roofing industry? How likely is it that this model will succeed when others have not worked out so well? Time will tell, but it is not likely to make a significant impact on most other commercial roof-contracting firms. We just cannot help being intrigued by the continuing saga of the consolidation of some commercial roofing contractors. We wish the managers and owners of Tecta well as they continue the work of reinventing the industry.