Beacon Roofing Supply Inc. has acquired Lookout Supply Co. of Chattanooga Tenn., Beacon announced today, one day after reporting in an SEC filing that an investment group has taken a 5.6% stake in the company worth roughly $40.8 million.
Lookout Supply distributes roofing systems and related accessories from its sole branch in Chattanooga. Company president Steve Persinger will stay with the company as a member of Beacon's regional leadership team. Pat Murphy Sr., vice president of Beacon's Southeast region, said the acquisition "provides Beacon with an excellent opportunity to enhance our current presence in Tennessee and to enter the Chattanooga market."
With the deal, Beacon now has 173 branches in 37 states and three Canadian provinces. The company ranks fifth on the 2009 ProSales 100, and while its net income dropped nearly 24% to $19 million in its fiscal fourth quarter ended Sept. 30, Beacon still posted a company-record $52.4 million net income for the year. (Related article.)
The new stakeholders are individuals and entities related to The Farallon Funds, a group of investment vehicles for high net worth individuals managed by Farallon Capital Management of San Francisco. Roughly 2.5 million shares were purchased in early December. At today's stock price of $16.15--the same price as on Dec. 1--that makes the investment worth roughly $40.8 million.
The public notification was made via a form 13G SEC filing, which means that the buyers don't plan to use their new investment to change or influence control of Beacon, but rather view their new stockholdings simply as an investment.