Stock Building Supply announced today that The Gores Group, a private equity firm that already controls a majority stake in the company, has purchased the remaining minority interest in the dealer from Wolseley Plc. The final sale price was for £15 million (US$23.7 million), according to a press release by Wolseley.
The Gores Group, based out of Los Angeles, has held a majority interest in Stock since May 2009. Wolseley, a British company, formed Stock's predecessor, Carolina Holdings, in 1986 when it purchased Carolina Builders.
In March 2009 Wolseley announced it was looking for a joint venture partner or it would exit the industry by Aug. 1 of that year. The Gores Group quickly stepped up and bought the 51% stake in Stock. The deal required Gores to invest $75 million in Stock and provide a $125 million revolving credit facility. Stock also had to enter Chapter 11 bankruptcy for two months as part of the deal.
"We have high expectations for Stock, and this transaction solidifies our position in the company," said Ryan Wald, managing director of The Gores Group. "Stock is well situated to weather the downturn and is capable of rapid growth as the market recovers."
Stock was once one of the top two companies in the LBM industry. It was ranked No. 2 on the 2009 ProSales 100 listing with $3.2 billion in sales. It has since fallen to No. 7 on this year's list with sales dropping to $818 million. As of Jan. 1, 2011, the company operated 57 stores throughout the country.
The Gores Group was founded in 1987 and currently owns 80 companies worldwide with total revenues of more than $15 billion.
"The Gores Group is an exceptional partner and has provided the support and leadership needed to re-position Stock in these turbulent times," said Stock CEO Jeff Rea. "This additional investment by Gores is a sign of confidence in our associates and our strategy, and we look forward to working collaboratively with The Gores Group in the future."