Beacon Roofing Agrees To Acquire Roofing Supply Group For $1.1 Bln Cash, Stock

(RTTNews) - Beacon Roofing Supply, Inc. (BECN), a distributor of residential and commercial roofing materials and complementary building products, said it has entered into a definitive merger agreement to acquire Roofing Supply Group or RSG, a roofing products distributor owned by investment firm Clayton, Dubilier & Rice, in a cash and stock transaction valued at about $1.1 billion.

The transaction is expected to be immediately accretive to adjusted earnings per share and to generate annual run-rate synergies of approximately $50 million. The transaction is targeted to close on October 1.

The acquisition brings Beacon to the Pacific Northwest with branches in Seattle and Spokane. As a result of the acquisition, Beacon will grow to $3.7 billion in revenues and have 356 branches in 45 states and six provinces across Canada.

RSG shareholders will receive approximately $286 million in cash and $291 million of Beacon common stock. Beacon will refinance approximately $565 million of RSG's net debt.

Beacon will fund the cash portion of the purchase price through a new ABL Revolver, Term Loan B and a senior unsecured bond offering.