With the purchase of seven former Wickes locations in July 2004 behind it, Broken Arrow, Okla.–based Hope Lumber and Supply continued to increase its Southeast market presence March 3 with the acquisition of 10-unit Kennesaw, Ga.–based Leeds Building Products. The deal—which completes a merger cycle begun in January 2003 when Hope purchased six Leeds locations in the Atlanta market—promises new big builder business for the former Leeds locations.
The newly added yards bring Hope's overall unit count to 51 and land the pro dealer in markets including Dade City, Tallahassee, Zephyrhills, and Largo, Fla.; Albany and Macon, Ga.; and Rock Hill and Spartanburg, S.C. According to Hope president Phil Alger, the Leeds yards will require little, if any, fine-tuning as they are brought into the fold, which is somewhat of a departure from Hope acquisitions past. “No acquisition is seamless, but this is going to be as seamless as we can get,” he says. “And that's not necessarily been our history. We've always kind of bought the ones that needed help, but Leeds is profitable and well-managed, so we are excited.”
Alger, for one, agrees. “We have had a growth direction going in the Southeast, and these yards put us in a position where we don't have to figure out how to do business in those markets—[the Leeds locations] are already there and doing it well.” The majority of Leeds personnel, systems, and operations—including credit, purchasing, and information technology—will remain intact as the company goes to market under the Hope banner. “The only thing different is that the checks for payroll and payables will come out of Tulsa now,” Alger says.
According to Poulos, the senior management teams at Hope and Leeds (which include Hope executive vice president and former Wickes CEO Jim O'Grady) have known each other for a long time, and the transfer of ownership has operationally been a non-event. “Other than Hope logos on the business cards and invoices and answering the phone differently, it's been pretty quiet,” he says.
That may change sooner rather than later as Hope's economies of scale and relationships with national production builders start to pump up the already high sales trend at the former Leeds locations. “When we originally purchased the Atlanta locations, we took away a lot of volume,” Alger explains. “So we are adding back that buying power that they have not had in the last year-and-a-half. We also have a fairly large presence with several national builders, and we will be able to add that to some of the locations as it makes sense.”
With the combined 2003 and 2005 acquisitions, Poulos estimates that the former Leeds locations now make up approximately 25 percent of Hope's volume, and he anticipates that the conjoined product and service expertise should push Hope over the billion-dollar mark. Alger says that level of volume should keep Hope occupied in terms of consolidation activity. “Adding the Wickes locations and these 10 Leeds locations will keep us busy for awhile,” he says. “So we won't be out aggressively looking for acquisitions as we have in the past—at least not for another year or so.”