US LBM Holdings LLC will buy Edward Hines Lumber Co. of Chicago, Hines' Indiana-based Hall & House subsidiary, and certain other units, US LBM's parent, BlackEagle Partners LLC, announced today. The deal is expected to be concluded by March 17 via a nonjuducial process, and both companies will remain in operation through then.

"This acquisition will make US LBM the 10th-largest distributor of buidling materials in the United States, according to the 2009 ProSales 100," BlackEagle said in a news release. Based on that latest ProSales 100 list, US LBM has revenues of more than $600 million. "The addition of Hines Lumber and Hall & House to US LBM substantially expands its operations, growing it to 30 locations serving six states with approximately 850 associates," BlackEagle's statement said. "In addition to a strong presence already in Chicago, US LBM plans on expanding operations opening the former Hines Lumber location in Mokena, Ill."

Hines, founded in 1892, has five lumberyards and specialty centers in the Chicago area. Besides framing lumber, it sells decking, exterior and interior doors, floor and roof trusses as well as custom millwork and kitchen design. Hall & House, which Hines acquired in 2008, is based in Westfield, Ind., and serves the Indianapolis market.

Bloomfield Hills, Mich.-based BlackEagle has invested heavily in LBM operations in recent years. It was a principal organizer in the deals that ended with US LBM acquiring Stock Building Supply's Wisconsin, New York, and Connecticut operations last year. US LBM also has operations in New Jersey and Connecticut. US LBM is based in Green Bay, Wis. Its president and CEO is L.T. Gibson, a former Stock executive.

BlackEagle, which owns US LBM in conjunction with Building Industry Partners LLC, said it will provide financing to Hines Lumber and to Hall & House while the sale consummates. It plans to acquire the yards through an assignment of a benefit to creditors proceeding. According to a paper on the American Bar Association's website, an Assignment "is simply a contract whereby the troubled entity (Assignor) transfers legal and equitable title, as well as custody and control of its property, to a third party (Assignee) in trust, to apply the proceeds of the liquidation of the assets to the Assignor's creditors in accord with priorities established by law." In many ways, the action is similar to a Chapter 7 bankruptcy proceeding. "Unlike a Chapter 7 however, an Assignee can more easily elect to keep the business operating while he tries to sell the company as a going concern," the ABA paper noted.

These may not be US LBM's last acquisitions. BlackEagle's statement said the company "seeks to acquire operations with No. 1 or No. 2 market share, supported by strong local management."