Building the nation: US LBM readies $100 million IPO
US LBM Holdings LLC “US LBM” is a Buffalo Grove, IL-based company that sells specially made building materials. US LBM is the third largest building materials supplier in mainland USA with over 182 locations across the 29 of the continent’s states.
US LBM was founded in 2009 when the demand for unique building materials was high. Since then the company has enjoyed a large customer base and a loyal clientele. A good reputation in the construction business has also brought US LBM a lot of customers, many of whom are homebuilders, contractors, building materials retailers and wholesale dealers. There are some lumberyards and other distributors in that list as well. These customers buy a variety of US LBM products including drywalls, acoustic ceilings, metal framing, house trims, sand and cement brands, decorative walls, building tools and insulation materials.
US LBM announced on Wednesday that it would be launching its IPO in the next few weeks. The company will trade under the stock label LBM on a US stock market that it will decide on later. The company did not disclose the number and type of shares that would be on offer. However, its SEC filing revealed that the company placeholder amount for the IPO deal is $100 million. Barclays Capital, RBC Capital Markets, and Credit Suisse will be the lead managers of the deal.
At the moment the investment atmosphere is receptive to an IPO from US LBM. In just the twelve months that ended December 31st, 2016, US LBM booked $2.7 billion in sales. Even with operational expenses and debt repayment factored in, the company made some substantial operating profits in the last year.
If you’re an investor, US LBM’s M&A portfolio could rope you into the IPO. Over the past few years, US LBM has been involved in many acquisition deals and as a result, its revenue has increased tremendously. Last year, US LBM got into a deal with Raymond Building Corporation. This M&A deal allowed US LBM to increase its sales reach within the USA. In 2015 the company bought a division of CEMEX USA. That deal served two purposes; one, US LBM was able to operate in the Florida and Alabama regions and two, the company launched into a whole new market: the new lucrative gypsum drywall market. US LBM has also made similar deals with firms like Alco Doors Inc. and Rosen Materials and in the process built a reputation for quality, increased its distribution capacity and its market. As the company expanded into previously-untouched sectors of the building industry, it acquired more customers along the way.
US LBM is also a good IPO candidate because the industry it operates in is a high-return low-risk investment. Steady earnings by US LBM and similar companies like Lowe’s Companies Inc. and BMC Stock Holdings Inc prove this. If you’re looking for a way to get your money back then investing in US LBM looks like a good way to get returns for years. And not just for a longer time but also at significantly lower risk compared to companies in other industries. So long as there is building going on, any investor can be assured of getting his or her money’s worth.