Freedonia Analyst Weighs In On Bain Capital’s Acquisition of US LBM

Bain Capital, a leading US private equity firm, announced that it had purchased a majority stake in US LBM, a key US building materials distributor, from Kelso & Company. The transaction is expected to close by the end of the year. US LBM is the nation’s fourth-largest building materials distributor, having more than 300 sales outlets across the country and annual sales of over $3.5 billion.

According to Freedonia Group industry analyst Matt Zielenski, “This transaction is indicative of the strength of the US building materials distribution, which has prospered even as the US has struggled to recover from the effects of the COVID-19 pandemic.  Buoyed by high lumber prices and strong consumer interest in DIY home improvement projects, building materials distributors have seen record sales during the pandemic. It is not surprising that Bain Capital would add to its investment portfolio by purchasing one of the nation’s leading firms in this market segment.”

In addition to the sale of building materials, US LBM also manufactures interior and exterior doors, floor and roof trusses, wall panels, and millwork. The company operates through a network of regional divisions, thus providing the advantages of a larger firm while allowing its subsidiaries to market themselves to core local and regional customers.

Zielenski also noted that “Bain Capital will continue to see benefits from the US LBM transaction going forward. Interest in DIY is expected to continue even after the pandemic passes. Furthermore, as demand for single-family homes continues to rise, building materials distributors such as US LBM will play a major role in supplying builders and construction materials with the many products needed for home building – lumber, prefabricated components such as roof and floor trusses, and millwork.”

For more information on the outlook for related building products – such as wood panels, siding, insulation, roofing, windows and doors, and building materials distribution – see the Construction Studies page featuring the following industry studies by The Freedonia Group:

Insulation

Roofing

Siding

Windows & Doors