With the ink barely dry on a Jan. 4 deal that saw Wheaton, Ill.-based pro dealer F.E. Wheaton becoming part of the Lanoga family, Redmond, Wash.-based Lanoga, a subsidiary of Fidelity Capital, announced Feb. 27 the purchase of Saginaw, Mich.-based pro dealer Wolohan Lumber. Financial details of the transaction were not released, but the deal is expected to close on March 27 and bring all of Wolohan's 18 locations in Michigan, Ohio, and Indiana, and $140 million in 2005 gross sales into the fold of Lanoga's Winona, Minn.-based United Building Centers (UBC) division.
According to UBC president Dale Kukowski, Wolohan and UBC make for a great fit both culturally and strategically. "Wolohan is so similar to UBC from a cultural standpoint that you change the sign and it is truly still business as usual," said Kukowski, who points to a belief in solid relationships with professional contractor customers and a strong focus on manufacturing capabilities as two key similarities shared by the two companies.
"UBC's experience in value-added manufacturing will only accelerate our existing commitment to this crucial business segment," agreed Wolohan President James Wolohan in a statement announcing the deal. "In addition, the operating philosophies and emphasis on customer service at each of the companies are very consistent, and this alignment was very important to us when selecting UBC."
Although Wolohan operations already include four door assembly shops, three wall panel manufacturing plants, and one roof and floor truss manufacturing plant, Kukowski indicated that UBC will be able to add even more manufacturing to Wolohan's geographic footprint. "Manufacturing was a part of the deal but not a big part of it," Kukowski said. "There was not enough manufacturing to really handle demand already and we'll need more, but the markets line up nicely for us. We'll probably be the dominant player in Michigan now, and the market additions in Ohio and Indiana are just great for us."
The Wolohan acquistion is Lanoga's second since announcing on Jan. 6 that the company was being purchased by Boston-based Fidelity Capital, which also owns South Plainfield, N.J.-based pro dealer The Strober Organization. On Jan. 17, Lanoga acquired the Irvington, Texas, operation of Houston-based Trussway. With pro dealer consolidation heating up, activity on the part of Lanoga could very well continue. In a feature article on industry mergers and acquisitions that will appear in the April issue of ProSales, Lanoga CEO Paul Hylbert comments that there remain great opportunities to continue to grow through acquisition, adding that "the fact that we would actively pursue the acquisition of F.E. Wheaton and Trussway during the time when we were in negotiations between Fidelity, Strober, and Lanoga exemplifies our attitude in that regard."
