(Reuters) — Buyout firm Kelso & Co is in advanced discussions to acquire US LBM Holdings LLC, in a deal that could value the U.S. building materials distributor at around $1 billion, including debt, according to people familiar with the matter.
Kelso has so far outbid other private equity firms in the auction for US LBM, the people said this week. US LBM’s owner, private equity firm BlackEagle Partners LLC, may yet decide to sell the company to another bidder or hold on to it if the negotiations with Kelso are unsuccessful, the people cautioned.
The sources asked not to be identified because the sale process is confidential. US LBM and BlackEagle Partners declined to comment, while Kelso did not respond to a request for comment.
Based in Green Bay, Wisconsin, US LBM provides lumber, roof and floor trusses, siding, and other building materials to custom homebuilders and professional remodelers, as well as multifamily and commercial contractors, in 21 states.
The company was created by BlackEagle Partners in 2009 as a platform with which to acquire building material distributors. It currently owns more than 20 such companies.
Dealmaking in the building materials sector has picked up as companies seek to develop synergies and better position themselves for the gradual recovery in the housing market.
In March, private equity firm Lone Star Funds acquired the North American and British building products business of Germany’s HeidelbergCement AG for $1.4 billion.
In April, Builders FirstSource Inc agreed to acquire U.S. building materials supplier ProBuild Holdings LLC for $1.63 billion. (Reporting by Greg Roumeliotis in New York; Editing by Lisa Shumaker)