The company controlling Roofing Supply Group (RSG), the No. 11 ProSales 100 company soon to be sold to Beacon Roofing Supply, racked up more than $143 million in net losses during the 37-month period ending June 30, an SEC filing released today shows.
Goodwill accounted for 36% of the $938.6 million in assets reported by CDRR Investors Inc., RSG's indirect parent, as of June 30, according to documents submitted by Beacon in connection with the sale. Meanwhile the liabilities side shows nearly $502 million in senior and term loan debt.
The filing gives important perspective to Beacon's July 27 announcement that it would acquire RSG in a cash and stock transaction valued at roughly $1.14 billion. Beacon stressed at the time that the deal adds 83 locations across 24 states to Beacon's portfolio, growing it to roughly $3.7 billion in revenues from 356 branches in 45 states and six Canadian provinces. (See map below.) The deal is targeted to close on Oct. 1.
Herndon, Va.-based Beacon will pay RSG shareholders--basically, the investment firm Clayton, Dubilier & Rice--about $286 million in cash and roughly $291 million in Beacon common stock. Beacon, the No. 3 company on the ProSales 100, also will refinance about $565 million of RSG's net debt. Today's SEC filing represents part of the data that prospective lenders are getting in connection with proposed debt financing.
When CDRR Investors spent $700 million on May 30, 2012, to acquire a company called Roofing Supply Group holdings RSG was showing a $4.4 million net profit on $353.8 million in sales for the first five months of that year. Over the next seven months, the CDRR-owned version of RSG posted $589.2 million in sales but a net loss of $24 million.
Sales in 2013 climbed to $999 million, but the net losses deepened to $65 million. And for 2014, sales reached $1.11 billion while net losses lightened to $33.3 million. And for the first six months of this year, RSG's sales totaled $567.8 million while net losses deepened to $20.9 million.