GMS Completes the Acquisition of Yvon Building Supply and Affiliates
GMS, a leading North American specialty building products distributor, has completed its acquisition of Yvon Building Supply and its affiliates, expanding their footprint in Ontario, Canada. The acquisition includes Yvon Insulation, Yvon Insulation Windsor, Laminated Glass Technologies, and Right Fit Foam Insulation. Yvon, with seven locations in Ontario, generated CAD$195 million in net revenues for the twelve months ending May 31, 2024. The transaction, valued at CAD$196.5 million, was funded with cash and borrowings from GMS’s revolving credit facility. This acquisition is expected to be slightly margin-accretive for GMS.
- GMS has expanded its market presence in Ontario, Canada.
- The acquisition is expected to be slightly margin-accretive.
- Combined net revenues of CAD$195 million from Yvon businesses.
- Purchase price of CAD$196.5 million, with a portion payable over five years.
- Funding includes borrowings from GMS's revolving credit facility, implying increased debt.
GMS Inc.'s acquisition of Yvon Building Supply and its affiliates is a strategic move to bolster its presence in the Ontario market. The acquisition was completed with a combination of cash on hand and borrowings from the company's revolving credit facility. This financing approach suggests prudent financial management, ensuring that GMS maintains liquidity while expanding its footprint.
Yvon's net revenues for the twelve months ending May 31, 2024, stood at
From an investor's perspective, the acquisition aligns with GMS's strategy of growing through acquisitions, particularly at valuations consistent with or below its market multiple. This disciplined approach to valuation helps in ensuring that acquisitions are value-accretive over time.
In the short-term, the acquisition might lead to some integration costs and minor disruptions within the newly acquired entities. However, in the long-term, the extended product offerings and expanded geographical reach within the Greater Toronto Area could lead to significant revenue synergies and improved market share.
The acquisition of Yvon Building Supply by GMS Inc. is noteworthy within the context of the North American specialty building products market. Yvon's strong presence in Ontario, with seven locations, adds substantial value to GMS's distribution network.
Ontario's construction market has been robust, with significant investments in residential and commercial projects. By enhancing its product offerings in this market, GMS positions itself to capitalize on ongoing and future construction activities. The inclusion of diverse product lines such as drywall, insulation and steel further reinforces GMS's ability to meet varied customer needs.
From a competitive standpoint, this acquisition strengthens GMS's market position in Canada, providing a competitive edge against local and regional players. The ability to leverage Yvon's existing relationships and customer base can drive incremental sales growth. Furthermore, as GMS integrates Yvon's operations, there could be opportunities for operational efficiencies, such as optimized supply chain logistics and consolidated procurement.
In summary, this acquisition enhances GMS's market reach and product depth in a key region, potentially driving both revenue and cost synergies.
This acquisition is a strategic move for GMS in the building supplies industry. Yvon Building Supply’s established operations in Ontario provide GMS with an immediate boost in market presence and service capabilities.
Yvon’s diverse product portfolio, including drywall, insulation and steel, aligns well with GMS's offerings, allowing for seamless integration and cross-selling opportunities. Furthermore, the acquisition is expected to be margin-accretive, indicating that Yvon’s operations are already profitable and should enhance GMS’s overall profitability.
Given the size of Yvon’s net revenues (
Moreover, the commitment to pay a portion of the purchase price over the next five years provides financial flexibility, ensuring that the company does not over-leverage itself in the short term. This prudent financial management is a positive indicator for GMS’s future stability and growth.
“As we highlighted during our recent earnings conference call for the fourth quarter and full year fiscal 2024, we are pleased to enhance our service and product offerings in the
With seven locations across
This transaction, which is expected to be slightly margin-accretive to the broader GMS business, was funded with cash on hand and from borrowings on the Company’s revolving credit facility. With more than a quarter of the
About GMS
Founded in 1971, GMS operates a network of over 300 distribution centers with extensive product offerings of Wallboard, Ceilings, Steel Framing and Complementary Products. In addition, GMS operates more than 100 tool sales, rental and service centers, providing a comprehensive selection of building products and solutions for its residential and commercial contractor customer base across
For more information about GMS, please visit www.gms.com.
Forward-Looking Statements and Information
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," or "should," or the negative thereof or other variations thereon or comparable terminology. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. The following important factors could cause the future results, to differ: the company’s growth strategy, changes in economic or industry conditions, competition, inflation and deflation, input costs, timing and integration of acquisitions, timing and implementation of price increases for the Company’s products, consumer markets, and other factors identified our filings with the SEC. We undertake no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise.
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Carey Phelps
Vice President, Investor Relations
Phone: 770-723-3369
Email: ir@gms.com
Source: GMS Inc.
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