Stock Building Supply's former president and CEO joined with the giant dealer's former COO to create Cornerstone Building Alliance, an investment firm seeking to take majority control of well-run building material distributors, manufacturers, and installers, the new company announced today.
Raleigh, N.C.-based Cornerstone's leadership features Fenton Hord, who led Stock during its huge growth phase but left before it reorganized under Chapter 11, and Steve Short, the dealer's chief operating officer until 2011. Cornerstone will be a unit of Investors Management Corp. (IM). Hord is a member of IMC's board of directors. Short will serve as Cornerstone's chief executive officer.
"Cornerstone targets companies with annual revenues of $10 million to more than $100 million, including one-step manufacturers, distributors and installers of dimensional lumber, engineered wood, roof and floor trusses, wall panels, sidings, windows, exterior doors and millwork, roofing, drywall, interior doors and millwork, cabinets and countertops," the company said in a news release. "Cornerstone expects to maintain local and regional brands, keep management teams in place and offer a great deal of operating autonomy."
But the statement also quoted Short as saying Cornerstone requires a majority position in the investments it makes even as it seeks to have management teams retain ownership in the company. "This allows our partners to financially participate in the recovery of the market and the success of the business," he said. "It also encourages them to continue making the best long-term decisions."
Stock had seven locations and $98 million in sales when he took over the company in 1987. When he retired 20 years later, in 2007, Stock had more than 350 locations and more than $5 billion in sales. Its growth was propelled in part through its acquisition by Britain's Wolseley Plc.
Soon after Hord left, both Wolseley and Stock saw sales and profits start to evaporate as the housing bubble burst. Wolseley eventually sold a 51% stake in Stock to the Gores Group, a California-based investment company, and at the same time Stock entered Chapter 11 bankruptcy-law protection from creditors. The company reorganized itself and emerged in 2009 as a much smaller, more focused company. It ranks 9th on 9th on this year's ProSales 100 with 58 branches and sales in 2011 of $774 million.
Short remained at the company until April 2011, when his COO position was eliminated in a management reorganization.