HERNDON Va. — Beacon is selling its interior product business, consisting of 81 branch locations, to affiliates of American Securities Inc. The $850 million transaction is expected to close during Beacon’s fiscal 2021 second quarter, subject to regulatory approvals.
“Today’s announcement represents an important strategic decision for Beacon,” said Julian Francis, Beacon president and CEO. “After undertaking a thorough analysis, we determined that a divestiture of Interior Products is in the best interests of our shareholders, as well as our Interiors customers and associates.”
Beacon’s interior products business includes wallboard, acoustical ceilings, steel framing and insulation for both residential and commercial contractors. This segment brought in $1.03 billion in net sales and a net loss of $11 million.
“This transaction will substantially accelerate our efforts to improve our balance sheet, reduce net leverage and provide the financial flexibility to pursue strategic growth initiatives in our core exteriors business to drive shareholder value,” said Francis. “We are excited about our start to fiscal 2021, especially the growth we are seeing in residential roofing sales. The Interior Products divestiture will allow us to focus entirely on driving growth and profitability in our core exteriors business.”
American Securities is a private equity firm that invests in North American companies. Kevin Penn, a managing director of American Securities, stated the company is excited to have reached an agreement with Beacon. The agreement follows the company’s November announcement of its take-private of Foundation Building Materials.
“This follow-on transaction represents an exciting opportunity to combine two companies that have made customer service their highest priority,” said Penn. “The combined company’s expanded geographic presence across the U.S. and Canada will enhance its partnership with customers, vendors, and team members. We look forward to closing the transaction early next year and integrating these two great companies.”
Goldman Sachs served as sole financial advisor to Beacon, and Sidley Austin LLP and Potter Anderson & Corroon LLP acted as legal advisors to Beacon on the transaction. Weil, Gotshal & Manges LLP served as legal advisor to American Securities on the transaction.