Carter Lumber views its acquisition of the Hall & House dealership's assets from US LBM as a way to boost its stake in the Indianapolis market as well as continue its investment in major Midwestern cities, Carter's chief operating officer said Monday.
"We see the Indianapolis market as a significant part of our growth strategy," Jeff Donley told ProSales in a telephone interview. "It's a good, solid Midwestern market for us. It fits right in the middle of Carterland. We see long-term growth for Indianapolis being positive."
That outlook contrasts sharply with that of L.T. Gibson, US LBM's CEO. "Given the market conditions and environment in Indianapolis, we were simply unable to achieve our goals," Gibson wrote in an e-mail to ProSales. "We decided to focus on the many other opportunities we have to grow our company, like the Lyman/ Myers transactions and the new locations we opened this year."
US LBM sold the inventory, rolling stock, machinery, and equipment at its Hall & House operation in Westfield, Ind., to Carter Lumber on Nov. 30. Carter also hired several Hall & House employees and brought them to its Noblesville, Ind., yard about 10 miles from Westfield on Indianapolis' north side. The Westfield facility wasn't part of the deal and has been closed. A showroom in Indianapolis has been shut for several months.
The move comes roughly eight months after Carter announced it would open a lumberyard and manufacturing facility in Franklin, Ind., south of the Hoosier State capital. That facility includes a door plant and production facilities for components, wall panels, and millwork. Donley said Carter plans to continue to rely on its Franklin yard to handle most of the shipping and delivery duties in the Indianapolis market.
Donley noted that Kent, Ohio-based Carter also has been making investments in the Detroit market, including the creation of its third facility in that area. Stock Building Supply and a number of large pro-oriented dealers have left that market, but Carter sees potential.
"We all know Detroit has had about as much bad press as city can get," Donley said. "... But things seem to have bottomed out. A lot of people have left that market, and we feel we can be a player. We see Columbus (Ohio), Detroit, Cleveland, Cincinnati as markets that we want to be No. 1 or No. 2 in."
Carter Lumber ranks 11th on this year's ProSales 100, with $534.6 million in sales last year, 82% of them to pros. It had 186 locations at the start of this year.
US LBM was created in 2009 out of companies that Stock Building Supply had acquired over the years and then shed when it went into Chapter 11 reorganization. In 2010, its first full year of opeation, the company posted revenues of $269.5 million, 98% of it to pros, and stood in 14th place on this year's ProSales 100.
US LBM took in Hall & House in February 2010 when the Green Bay, Wis.-based company acquired Edward Hines Lumber. The Hines operations remain in business and have in fact grown since joining US LBM. "The sale to Carter may not have been our best financial option, [but] it was the best for our employees and customers so we decided it was our best course of action,." Gibson said.
In July, US LBM acquired John H. Myers & Son, a six-unit dealership based in York, Pa. And in October, US LBM took over Lyman Lumber, a Minnesota-based firm that had filed for Chapter 11 bankruptcy. The acquisition included Lyman's location in Chanhassen, Minn., and its various subsidiaries, among them Automated Building Components, Carpentry Contractors Corp., and Lyman Lumber of Wisconsin.