Roofing Distributors Shield Themselves from Competition through Acquisitions

Roofing Distributors Shield Themselves from Competition through Acquisitions

Demand for roofing in the US is forecast to grow as new housing starts increase and homeowners replace older roofing to beautify their homes and boost property values.  Roofing distributors -- companies that buy roofing in bulk and re-sell it in more manageable quantities to contractors and other customers -- are poised to capitalize.  Distributors such as ABC Supply, Allied Building Materials, Beacon Roofing Supply, and SRS Distribution offer a broad range of residential and commercial roofing products and provide contractors with a number of key value-added services, such as convenient delivery options and training and marketing programs.

Leading Distributors Use Acquisitions to Expand Market Share

The US roofing distribution market has seen a flurry of acquisition activity since 2015 as industry leaders have worked to boost market share by purchasing competitors.  Roofing distributors use acquisitions to:

  • Add to their network of sales locations
  • Enter into new local and regional markets
  • Access a new base of contractor customers
  • Offer new product lines, such as siding, insulation, and windows and doors

ABC Supply Looks to Enter New Market with L&G Supply Purchase

One company that has offered new products as a growth strategy is ABC Supply, which, in November 2016, purchased L&W Supply from USG.  L&W Supply served as USG’s distribution subsidiary, selling that company’s drywall, ceiling tile, framing materials, and related building products.  ABC Supply’s purchase of L&W Supply not only added more than 100 sales locations to its nationwide network of distribution outlets, but allowed ABC Supply to offer those complementary building materials alongside its extensive roofing product lines.  As roofing contractors increasingly expand into providing other home improvement services, the purchase of L&W Supply will allow ABC Supply to reach more customers, such as those who install attic insulation or those who engage in structural home repairs.

Beacon Roofing Supply Uses Broad-Based Acquisition Strategy to Add Locations

Beacon Roofing Supply has also greatly expanded its presence in the US roofing distribution market, having purchased about a dozen distributors since 2015.  Like ABC Supply, the company has not shied away from big splashes in the market, such as its October 2015 purchase of Roofing Supply Group:  The transaction added more than 80 locations to Beacon Roofing Supply’s nationwide network of sales outlets.  Furthermore, Beacon Roofing Supply was able to add a number of new product lines, including siding, insulation, and exterior trim.

However, Beacon has also boosted its presence in the US roofing distribution market through smaller moves, such as its recent acquisition of Acme Building Materials.  The purchase of Acme expanded Beacon Roofing Supply’s presence in Michigan, particularly in the key suburban Detroit market.

SRS Distribution Acquires Six Roofing Distributors in 2016

SRS Distribution -- another major distributor of roofing in the US -- purchased six roofing distributors in 2016, adding 14 sales locations to its nationwide network.  These purchases -- highlighted by the company’s acquisitions of Metro Roofing Supplies and Atlantic Building Products  -- targeted key markets.  Metro Roofing Supplies markets roofing in the Boston and metropolitan New York City urban areas, while Atlantic Building Products distributes roofing throughout the Carolinas.

As roofing demand is forecast to rise, distributors will continue to look for acquisition targets to further expand their market share and their base of operations.  For more information about the US roofing distribution market, check out Roofing Distribution in the US, a new study published by The Freedonia Group. This study includes analysis of sales channels, US census subregions, and  company market share, and much more.

For more new information about roofing distributors by revenue and US subregion, check out Roofing Distributors in the US


About The Author:

Matt Zielenski is a Senior Analyst at The Freedonia Group, where he covers trends in the use of building materials and related construction products in the US market.