Dallas-based Builders FirstSource Inc., a building material and service provider, announced it has agreed to acquire Cornerstone Building Alliance SW LLC for approximately $400 million, subject to adjustments.
The acquisition will be funded through a combination of existing cash and credit facilities and is expected to close around the end of the second quarter of 2021, Cornerstone said in a statement.
“This acquisition is aligned with our strategy of investing organically and through M&A, to shift our portfolio toward high-value and faster-growth categories,” said Dave Flitman, President and CEO of Builders FirstSource. “We will be opportunistic in pursuing value-enhancing investments, such as Cornerstone, that align with our culture, value-added product focus, and high return thresholds.”
More than 300 Cornerstone employees will be joining Builders FirstSource, the company said in a statement.
Primarily serving the greater Phoenix area, Cornerstone has been the largest independently operated supplier of building materials in Arizona. Cornerstone reported approximately $330 million in sales as of April 2021.
It’s been an incredibly busy year for builders and companies like Builders FirstSource, which distributes dimensional lumber and lumber sheet goods, millwork, windows, interior and exterior doors, and other building products. An April report from the National Association of Home Builders found that lumber prices have tripled over the past 12 months, causing the price of an average new single-family home to increase by $35,872 — up from the NAHB’s calculated $24,000 extra HousingWire reported back in February.
The hike has also added nearly $13,000 to the market value of an average new multifamily home, which translates into households paying $119 a month more to rent a new apartment, the NAHB said.
A slew of materials were taken into account when calculating the new costs for homeowners, including beams, joists, headers, rafters and trusses, sheathing, flooring and underlayment, interior wall and ceiling finishing. The cost of cabinets, doors, windows, general roofing and siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls were also taken into consideration.