A ProBuild spokesperson confirmed late Thursday a Reuters report that said ProBuild's parent company has spent $345 million over the past six months to cover losses at the dealer and might have to pay another $105 million through January to buttress America's biggest LBM operation.
Reuters based its report on a confidential prospectus for a recent Fidelity debt offering. "Fidelity's parent, FMR LLC, has spent $345 million over the past six months to cover losses at ProBuild," Reuters said. "Under a recapitalization plan adopted in May, Fidelity could be on the hook for another $105 million through January 2010."
To that, ProBuild director of marketing and communications Carolyn Atkinson said in an e-mail to ProSales: "I can confirm the numbers in the Reuters article and beyond that, ProBuild has no additional comment."
Reuters quoted Fidelity spokeswoman Anne Crowley as declining to discuss the specifics of ProBuild and saying any assessment of a deal should take into consideration its long-term potential. ProBuild is a unit of Fidelity's Devonshire Investors.
The report also quoted an analysis by bond rating agency Standard & Poor's that said ProBuild lost money in both 2007 and 2008 and is unlikely to be profitable this year.
ProBuild CEO Paul Hylbert has said ProBuild expects to generate about $3 billion in sales this year. It ranks first on this year's ProSales 100, with 2008 sales of $4.4 billion.
ProBuild was created earlier this decade when several major LBM operations were rolled into one. According to Reuters, Fidelity paid $1.14 billion for Lanoga Corp. and $548 million for Hope Lumber, and then spent $139 million more in 2007 and $160 million in 2008 on various other acquisitions. (See the ProSalesdeals database.)
