Superior Plus Corp., the Canadian-based parent of Winroc--No. 14 on the ProSales 100--has entered into an agreement to sell specialty dealer Winroc and the rest of its Construction Product Distribution business to Foundation Building Materials of Tustin, Calif.
Foundation will pay C$420 million (US$325 million) for Superior's distribution network, which spans Canada and the U.S., Superior said in a July 5 news release. The transaction is expected to close in the second half of this year.
The purchase increases dramatically a Foundation Building Materials that already had grown dramatically. In just five years of existence, this specialty dealer for drywall, steel studs, insulation, and acoustical ceilings has grown to encompass nearly 100 branches in 18 states, according to its website. Now this privately held company has added a Winroc business that in the U.S. alone (according to information provided to ProSales) sold $484.4 million worth of goods in 2015 and had 82 U.S. branches with nearly 1,100 employees as of the start of this year.
The combined Foundation/Winroc operation appears in position to rival Gypsum Management & Supply, the self-described No. 1 firm in the drywall/studs/insulation/ceilings sector. GMS operates about 185 branches and claims to sell 13% of all wallboard and 14% of all suspended ceiling systems.
Superior said it was selling its Construction Products Distribution arm "to reduce debt, increase its financial flexibility, and enable Superior to redeploy capital to its Energy Distribution and Specialty Chemicals businesses. The divestiture of CPD simplifies Superior's business model by exiting its most cyclical business."
Superior has been trying to expand its chemicals business. It had a deal to acquire Canexus, another Canadian chemicals firm, but that purchase fell through in late June.