In a move that combines the Nos. 5 and 16 companies on the ProSales 100, Stock Building Supply Holdings LLC announced today it will buy the assets of Bison Building Holdings, a Houston-based dealer that has been in Chapter 11 bankruptcy since last June.
Raleigh, N.C.-based Stock intends to buy Bison's assets around June 29 under Section 363 of the federal bankruptcy code's Chapter 11.
Chapter 11 typically gives a company protection from creditors while it reorganizes--a process that Stock itself used last May and June, when The Gores Group bought 51% of Stock from its previous majority owner, Britain's Wolseley Plc. Section 363 enables a purchaser to buy the assets of a company in Chapter 11 free and clear of any liens or encumbrances. The liens and encumbrances then get paid out of the net proceeds of the sale.
The deal adds Bison's eight Houston-area locations to the three that Stock already had in the market. Metro Houston is generally regarded as one of the country's most robust housing markets. "The combination of Bison and Stock creates a clear market leader in Houston with the breadth of capabilities and combined talent to deliver a compelling value proposition to our customers," Stock CEO Joe Appelmann said in a statement.
Today's acquisition news follows the announcement a month ago that Stock had acquired National Home Centers, an Arkansas-based dealer that ranks 26th on this year's ProSales 100 and also was in Chapter 11. Stock, which as a result of last year's reorganization and slimming down fell from second to fifth on this year's list, posted sales of $1.43 billion last year, down 54% from 2008. The move made Arkansas the 20th market in which Stock operates nationwide.
Bison was 16th on the ProSales 100 list with 2009 sales of $214 million. Based on its bankruptcy court filings, the company has accumulated more than $5.5 million in net losses since it entered Chapter 11 last June 28. Bison attributes its descent into Chapter 11 to its expansion along the Interstate 35 corridor in 2005 and then into Nevada, Arizona, Colorado, Ohio and New Mexico. When the housing market soured, Bison retrenched to its core Texas business in metro Houston and encountered trouble unwinding its ventures outside of Texas.
"This is an exciting opportunity for Bison, our customers and employees," Bison chief operating officer Tom Tolleson said. "Stock's national reach, financial stability and strong customer relationships make it an ideal partner for Bison. We look forward to working with Stock's management team to ensure a smooth and rapid transition."
Stock's announcement didn't say what would happen to Bison's officers and employees or whether the company would keep open all of its newly consolidated Houston-area branches.