The private investment firm Kelso & Co. "is in advanced discussions" to acquire US LBM, the fast-growing full-service lumberyard that is this year's ProSales Dealer of the Year, the Reuters news agency reported late July 1. The deal would value US LBM at about $1 billion, or roughly 10 times the profit it generated on $1.42 billion in revenue last year.

A US LBM official said the company had no comment.

The Reuters story, based on unidentified sources, added:

Kelso has so far outbid other private equity firms in the auction for US LBM, the people said this week. US LBM's owner, private equity firm BlackEagle Partners LLC, may yet decide to sell the company to another bidder or hold on to it if the negotiations with Kelso are unsuccessful, the people cautioned.

The fact that US LBM is for sales has been an open secret all this year. A prospective sale is about the only dark cloud hanging over the high-flying company, which reported 79% sales growth last year. We have referred to sale negotiations in past stories as a battle for US LBM's soul because it will test whether the next owner will embrace US LBM's management philosophy, which centers on a tiny headquarters staff, almost total local control, and widespread sharing of best practices. About 25% of US LBM is owned by its president, L.T. Gibson, and the presidents of its operating units.

Read the Reuters report.