If Kodiak Building Partners had a motto, it might be work smart, not hard. Though the company is only relatively young, it’s already earning more than $157 million in annual total sales, with six locations and 360 employees. It owes most of its success not to organic internal growth— though it had plenty of that this year—but to acquisitions made by the company’s founding partners led by former ProBuild CEO Paul Hylbert.
“We’re very optimistic about the marketplace,” Hylbert says. Optimistic is one way to put it, but president & COO Steve Swinney has another word for it: bullish. In 2013, the company acquired New England Building Supply, based in Boston, and in April this year it bought the assets of Factory Builder Store, inHouston. Hylbert says that the newly acquired businesses should add $75 million to its annual sales totals.
Kodiak Building Partners
- Sales growth: 124%
- 2013 total sales: $157 million
- 2013 total sales per location: $26.1 million
- 2013 total sales per employee: $245,238
The idea is simple. Kodiak acquires—or as it would say, partners with—dealers that do their job well.
“We buy the company,” Swinney says, “but typically the seller takes a portion of that deal payment in interest and ownership in Kodiak. We think it’s the best way to do business.”
And with so much growth in the market, Hylbert compares the company’s acquisition strategy to a land grab. Kodiak is a hungry beast, and there’s plenty to eat.
“We see a very strong opportunity for investment over the next several years,” Hylbert says.
One challenge that the company might face isn’t finding opportunities to grow, but finding the right opportunities to grow. How does one find the right company to buy? Hylbert and his team think the key indicator of a strong company is its management.
“The largest hang-up to our growth is finding good management teams. We’ve got to have the right management teams because we’re not the geniuses that are going to run [our acquired] businesses,” Hylbert says.
On the flip side, it’s prime time to buy, and Swinney says that his company wants in before that window closes. “We’re very cautious and considerate in terms of not getting overly excited,” he says. “As a result, sometimes the deal isn’t going to come together.”
If the market was a baseball game, Hylbert says there’s plenty of game left to play, and plenty of runs left to score: “We think we’re maybe in the third inning, bottom of the third, top of the fourth. There’s plenty of opportunity to grow before we get to anywhere near the equilibrium level for construction activity.”