Beacon Roofing Supply, Inc.
Beacon Roofing Supply, Inc.
1 Lakeland Park Drive
Peabody, Massachusetts 01960
Telephone: (978) 535-7668
Toll Free: (877) 645-7663
Fax: (978) 535-7358
Web site: http://www.beaconroofingsupply.net
Sales: $652.9 million (2004)
Stock Exchanges: NASDAQ
Ticker Symbol: BECN
NAIC: 423330 Roofing, Siding, and Insulation Material Merchant Wholesalers
Beacon Roofing Supply, Inc. owns regional distributors of roofing and related building materials, maintaining a leadership position in an estimated $10 billion U.S. market. The regional affiliates owned by Beacon Roofing operate under their own identities, giving their parent company a presence in 16 states in the Northeast, Mid-Atlantic, Southeast, and Southwest regions of the United States and in eastern Canada. Beacon Roofing affiliates include: West End Lumber Co.; The Roof Center; Best Distributing Co.; Quality Roofing Supply, Inc.; Beacon Sales Company; Coastal Metal Service; JGA Corp.; Commercial Supply, Inc.; and Shelter Distribution, Inc. The company operates in Canada through Beacon Roofing Supply Canada Co. Beacon Roofing operates 83 branches in North America.
Because it owned a number of regional roofing companies, each with distinct founding dates and places of origin, Beacon Roofing could lay claim to historical roots stretching back to the late 19th century, but the core of the company, and its namesake, was founded in 1928. In 1928, a company named Beacon Sales Company, Inc. began operating as a commercial roofing supply business in Somerville, Massachusetts. Beacon Sales became the foundation of Beacon Roofing—the principal constituent of a family of regional roofing firms owned by Beacon Roofing—but the process by which a small New England roofing firm developed into a company with national aspirations did not begin until more than a half century after operations first began in Somerville. The individual responsible for transforming Beacon Sales into Beacon Roofing was Andrew R. Logie, whose leadership and vision created the makings of a company advancing toward $1 billion in annual sales.
Logie's influence on the stature of the Beacon name in the roofing industry was profound, highlighted by impressive geographic expansion and a nearly 70-fold increase in annual revenues. Logie, who attended Nichols College in Dudley, Massachusetts, brought with him more than a dozen years of experience in the roofing business when he took the helm at Beacon Sales, spending five years at GAF Corporation and nine years at Bradco Supply. Logie and a group of investors acquired Beacon Sales in 1983, taking control of a company with slightly more than $10 million in annual sales. In the 55 years since its founding, Beacon Sales had achieved modest growth, adding branch offices in Worcester, Massachusetts, and Lewiston, Maine. The pace of expansion increased considerably after the arrival of Logie, who was appointed as Beacon Sales' new chief executive officer after the investment group acquired the company. Logie began shaping Beacon Sales into a regional distributor serving all of New England, establishing each new branch near contractors to facilitate deliveries to job sites. In less than 15 years, he turned Beacon Sales from a three-office into a nine-office company, developing, during this period, a distribution model on the local, branch-office level that would become the basis of Beacon Roofing's operating strategy. Sales growth reflected Beacon Sales' physical expansion, as the company's annual revenue volume swelled from approximately $11 million to $70 million during Logie's first decade-and-a-half of leadership.
The development of the company during the 1980s and 1990s marked a period of tremendous growth, but it paled in comparison to the growth achieved at the turn of the millennium. A new era for the Beacon name began in 1997, one that, like the company's first era of aggressive growth, continued to be dominated by Logie.
Formation of Beacon Roofing in 1997 Leading to Acquisition Spree
In 1997, after turning Beacon Sales into a genuine regional player in the roofing industry, Logie gained the support of new financial backers. In September, a Chicago investment banking firm named Code Hennessy & Simmons, LLC acquired a controlling interest in Beacon Sales, entrusting the firm's investment to the proven managerial skills of Logie. Logie was named chairman, chief executive officer, and president of a newly formed company, Beacon Roofing Supply, Inc., which became the parent company of Beacon Sales and the maypole around which other regional roofing companies would revolve. The expectations of the first investment group in the early 1980s had been to make Beacon Sales a prominent player in New England's roofing industry. The expectations of Logie's second investment team were far more ambitious, involving not only the expansion of Beacon Sales but also the acquisition and expansion of other roofing companies operating outside New England. Beacon Roofing, with Logie as its chief architect, set its sights on becoming a national force in a highly fragmented industry, scoring noticeable success within the first decade of pursuing its ambitious goal.
Beacon Roofing's expansion strategy depended heavily on acquisitions. Although the company expanded by internal means as well, the primary source of its physical and financial growth was the addition of other regional roofing concerns, which retained their identity after being acquired by Beacon Roofing. Logie began his acquisition campaign in 1998, purchasing Quality Roofing Supply, Inc. Founded in 1949, Quality Roofing opened his first branch in Reading, Pennsylvania, offering shingles, siding, gutters, windows, and doors to contractors involved in the residential roofing market. The company remained focused on residential exterior products until it was acquired by Roofers Mart in 1988, a transaction that broadened its exposure in the roofing market and fueled its physical expansion. Roofers Mart operated as a coalition of independent commercial roofing contractors, giving its members enhanced purchasing power. For Quality Roofing, joining Roofers Mart gave the company the opportunity to offer commercial roofing product lines, making it a comprehensive supplier to contractors involved in both segments of the roofing market. With its product lines expanded, Quality Roofing spent the ensuing decade adding new branch offices throughout Pennsylvania and into Delaware.
Quality Roofing was one of seven regional roofing distributors purchased by Beacon Roofing between 1998 and 2001. The oldest of the companies purchased during this period was Best Distributing Co., a Goldsboro, North Carolina-based company founded in 1880 as Best and Thompson by Marcellus J. Best and B.G. Thompson. The business, which began as a single retail store in Goldsboro, was governed by the Best family during the ensuing decade, with each generation of leadership altering the strategic focus of the company. During the 1930s, the second generation of the family, under the leadership of William H. Best, began focusing on building supplies as the store's main line of merchandise. The next generation, under the leadership of William Best's sons, Mark and Munroe, made the most profound change in the history of the family business, abandoning the retail trade and recasting the company as a wholesaler of building supplies. By 1948, Mark and Munroe Best had made Best Distributing one of the leading building supply wholesalers in North Carolina, serving as a major supplier of wire fencing, cement, sheet metal, roll roofing, and paint to contractors. By the time Beacon Roofing acquired Best Distributing, the company was under the control of the fourth generation of the family, led by Munroe Best, Jr., who narrowed the company's focus to roofing supplies and materials. The acquisition of Best Distributing also included Coastal Metal Service, a company started by Best Distributing in 1991. Coastal Metal began as a metal shop in Goldsboro, where it provided contractors with custom metal roofing systems.
As Logie neared the end of the first stage of his acquisition campaign, he completed several deals that reflected the ambitious nature of his plans for the company. The acquisition of Exeltherm Supply Inc., in particular, offered evidence of a company pursuing expansion plans far grander than the growth strategy developed under the aegis of Beacon Sales. Exeltherm Supply, founded in 1994, became Beacon Roofing Supply Canada Co., the international arm of Beacon Roofing, an entity with commercial and residential roofing distribution offices in Toronto, Ottawa, and Winnipeg. Logie's reach into Canada extended farther with the addition of Groupe Bedard, a commercial and residential roofing material supplier based in Quebec that operated as part of Beacon Roofing Supply Canada Co. In 2001, Logie added two more roofing distributors to Beacon Roofing's stable of companies, strengthening the company's presence on the East Coast and extending its presence into the Southwest. The older of the two companies was West End Lumber Co., founded in Houston, Texas, in 1923 by R.W. Peckham. Peckham founded West End as a lumber company, registering his greatest financial success during World War II, when his business's most profitable products were roofing shingles and shakes. In 1974, a descendant, William H. Peckham, sold the company to Bob Burns and Bebe Burns, who expanded the company during the 1980s when the demand for roofing materials increased. In 2000, the Burnses merged their company with The Roof Center, a building materials distributor based in Gaithersburg, Maryland, that began operating in 1977.
The mission of Beacon Roofing Supply Inc. is to be a leading North American supplier to commercial and residential roofing and exterior building contractors through a family of long-established regional suppliers and to add value to our contractor customers' businesses, to our employees' careers, to our investors' assets, and to our suppliers' products.
Initial Public Offering in 2004
A lull in acquisitive activity followed the purchase of West End Lumber and The Roof Center. During the respite, the company turned to internal means of achieving growth, expand-ing by opening two branches in 2002 and 2003. The growth achieved was not much, but the seven acquisitions completed produced stunning growth for the five-year period between 1998 and 2003. Sales increased at a compounded annual growth rate of nearly 49 percent during the period, mushrooming from $76.7 million to $559.5 million. Beacon Roofing, after its initial surge of growth, stood as a formidable competitor in half of North America, projecting sufficient strength for Logie to consider selling the company on Wall Street. In 2004, the company began preparing for its initial public offering (IPO) of stock, seeking to raise capital to continue its acquisition campaign. In September, when Beacon Roofing operated 66 branches in 12 states and three Canadian provinces, the company completed its IPO, selling 8.5 million shares at $13 per share, which raised $102 million in net proceeds.
In the wake of its IPO, Beacon Roofing struck out on the acquisition trail again. In December 2004, the company acquired JGA Corporation, a distributor of roofing and other building products. Based in Atlanta, Georgia, JGA operated eight offices in Georgia and Florida, offering a comprehensive line of residential and commercial roofing products. The company generated $74 million in revenue in 2003, its 26th year of business. Beacon Roofing completed two more acquisitions before the end of its fiscal year in September 2005, acquisitions that were expected to be followed by other additions in the years ahead. In August, the company completed one of the largest acquisitions in its history, purchasing Shelter Distribution, Inc., a McKinney, Texas-based distributor of roofing and other building products. Shelter Distribution operated 50 branches in 14 states in the Midwest, Central Plains, and Southwest regions, providing Beacon Roofing with entry into a dozen new states. Shelter Distribution, which focused on the residential segment of the roofing market, generated $248 million in sales in 2004. The acquisition of Shelter Distribution was followed by the purchase of Commercial Supply, Inc. in September 2005. Commercial Supply, a fraction of the size of Shelter Distribution, posted $1.4 million in sales in 2004 from its sole branch office in Holyoke, Massachusetts.
Beacon Sales Acquisition, Inc.; Quality Roofing Supply, Inc.; Beacon Canada, Inc.; Best Distributing Co.; The Roof Center, Inc.; West End Lumber Company, Inc.; Beacon Roofing Supply Canada Company.
The Home Depot, Inc.; Lowe's Companies, Inc.; Stock Building Supply Inc.
- Beacon Sales Company is founded.
- An investment group headed by Andrew R. Logie acquires Beacon Sales.
- Beacon Roofing Supply, Inc. is formed after a Chicago investment firm, Code Hennessy & Simmons LLC, acquires Beacon Sales.
- The acquisition of Quality Roofing Supply, Inc. touches off an ambitious acquisition campaign.
- After acquiring its seventh regional roofing products distributor, Beacon Roofing's sales eclipse $500 million.
- Beacon Roofing completes its initial public offering of stock.
- Beacon Roofing acquires Shelter Distribution, Inc.
"Beacon Adds The Roof Center and West End Lumber to Its Affiliation of Regional Suppliers," Roofing Contractor, August 2001, p. 10.
"Beacon Roofing Acquires Shelter Distribution," Home Channel News NewsFax, August 15, 2005, p. 1.
"Beacon Roofing Buys JGA Corp.," UPI NewsTrack, December 16, 2004.
"Beacon Roofing Supply Inc. Announces Strategic Acquisition," Roofing Contractor, January 2005, p. 8.
Romans, Christine, "Beacon Roofing Supply Prices IPO of $13.5 Million at $13 Each," America's Intelligence Wire, September 22, 2004.