2012 ProSales 100 Profiles: SRS Acquisition

The ProSales 100 is as much a collection of individual stories as it is a tale of an entire industry. Here’s a look at one of six members of the club who all merit special attention, and all for vastly different reasons.

Companies have rarely risen through the ProSales 100 ranks like SRS Acquisition. The McKinney, Texas-based roofing material supplier ended 2008, its first year in business, with $120 million in total sales and 18 locations, putting it 29th on the PS100. SRS ended 2011 with $540 million in total sales, 98% of it to pros. That’s a 54% increase over 2011. Now its $529.2 million in pro sales put it at No. 12.

Ron Ross, the company’s CEO, predicts sales of $800 million and a total of 100 locations by the end of 2012; SRS already has added nine in the first four months of this year to the 64 it had on Jan. 1. But don’t look for the SRS name on those stores. It operates under 16 different brand names, each tending to cover a single geographical area.

It got those names by buying companies that it believes have a good reputation. Then its builds them up by retagging other acquisitions with the same name and by creating greenfield startups in that brand’s region.

Ross knows a thing or two about building a business. He did it at Cameron Ashley Building Products, which was bought by Guardian Building Products in the early 2000s, and then at Shelter Distribution, which he grew between 2003 and 2005 before selling out to Beacon Roofing Supply.

He says decisions to open a greenfield location are usually based on the ability to get a good manager and salesperson to start up the operation. When doing so, Ross relies on contacts he has built up over the years to help him find the right people. As for acquisitions, he says it usually comes down to finding a company with a good reputation in a new market.

“We want to grow profitably and sensibly,” says Ross. “We grew up in this business, so there is a lot of due diligence.”

Ross doesn’t deny, however, the roles Mother Nature and the economy have played in SRS Acquisition’s success over the past year. He says abnormal weather and higher roofing material prices have helped drive business. Compared with the 1990s, times are good.

“Back then, we barely made an 8% return on investment,” he says. “Now we are in the low teens.”