An acquisition timeline

national builders or large custom production builders to others that operate a more ‘home center’ model and service contractors and DIYers.”

Additional divisions focus on specialty offerings such as drywall, windows, doors or millwork. “Our strategy is simple – provide the customer what they need and whatever we provide them with, we do it well,” Gibson says.

It’s not a one-size-fits-all approach either as US LBM adopts specific plans and programs around how it can best serve the customers in its markets while continuing to grow its business. “The advantage of us coming together as one enterprise is that in one market we may have strong relationships with specific customer types or a range of competencies in a category or specialty area, and we’re able to build on those relationships or embed and replicate those capabilities in other markets,” says Gibson.

Gibson also noted that he is particularly proud of the company’s charitable arm, the US LBM Foundation, founded in 2013. In 2021, it donated more than $400,000 to charities. Its efforts included partnering with the Gary Sinise Foundation to help build custom housing for wounded veterans, providing funding to support tornado victims, and teaming with Meals on Wheels to combat hunger and isolation among senior citizens.

Supply challenges

But looking to the rest of 2022 and beyond, disruptions continue to daunt the industry. Supply chain issues continue to be a challenge while long lead times across multiple product lines have increased the cycle time from start to close in residential construction.

“In some cases, this caps the ability of our customers to grow,” says Pat Managan, senior vice president of Supply Chain at US LBM. “Additionally, volatility in commodity lumber and panel prices add complexity for our customers in how they take their products to market.”

The buying power and national strength of US LBM have been key in assisting customers in local markets. US LBM’s size allows it to navigate the supply chain.

Gibson says that US LBM has strengthened its relationships and partnerships with strategic suppliers, enhanced the company’s demand planning process and increased communications to help battle the supply chain environment.

“With supply chains tight, those relationships have been critical in allowing us to keep running our day-to-day operations while still organically growing, opening five roofing and siding focused greenfields last year and two more this year,” Gibson says. “Those greenfields have been in adjacent areas to existing markets for us, allowing us to grow with and support our customers as they expand, knowing they can rely on the brands, service, and quality we bring.”

Events of the past 18 months have also accelerated customers buying into using new technology. Gibson notes that US LBM was one of the first dealers to introduce a mobile app and now the company is focusing on how it can build on technology, including making it easier for customers to do business with the company.

The LBM industry is ripe for additional acquisitions to come. The next four to five years are projected to witness large numbers of owners and executives retiring from family-owned LBM businesses.

Gibson says independents are looking to sell for a variety of reasons, including the pandemic, supply chain, tax and labor issues, while seeing record sales dollars, in large part

Acquired this past September, Mid-Cape Home Centers strengthens US LBM's presence in Massachusetts and New England.

US LBM Acquisition Timeline

Here are the acquisitions US LBM has made since November 2020.

Company Zeeland Lumber & Supply Ridgefield Supply Tri-County Building Supplies Gilcrest/Jewett Jennings Builders Supply Villaume Industries

Acquired 11/1/2020 12/1/2020 12/17/2020 12/31/2020 12/31/2020 2/1/2021 Higginbotham Brothers 5/1/2021 J.P. Hart Lumber & Components 7/1/2021 Brand Vaughan Lumber 7/1/2021 American Construction Source (ACS) 7/1/2021 Home Center Supply 7/1/2021 Massey Builders Supply 8/1/2021 Junior's Building Materials 8/1/2021 North Georgia Building Supply 8/1/2021 Mid-Cape Home Centers 9/1/2021 Northern Building Supply 9/1/2021 Oldham Lumber 10/1/2021 BuilderUp 11/1/2021 Arrowhead Stairs & Trim 11/1/2021 Barrons 12/1/2021 Professional Builders Supply 12/1/2021

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because of high lumber prices and now inflation—all of which are occurring against a backdrop of strong forecasts for construction.

“Obviously, there may be more opportunities and competition because of the general condition of the market and the country, but our philosophy has not changed—we’re still looking to partner with the best companies in their markets with strong teams in place,” the CEO says.

US LBM expects demand to continue outpacing supply in the coming year. Gibson also points out that the flexibility of remote working coupled with the rising costs for renters is pushing more people to buy in new places.

“Starts and permits may bounce up and down month to month, which we just saw with November housing starts being below the forecasted rate nationally but shattering expectations in December with the highest levels since March. But the consensus is that we’ll see the overall trend continue to be upward in 2022 and 2023 nationally,” Gibson says.

With new construction rates differing from region to region, US LBM benefits from its geographic diversity. “In other markets, you might see new construction growth at lower rates balanced by higher rates in repair and remodel, and the diversity of our product mix, geographies, and operational expertise allow us to realize those opportunities, too,” Gibson explains. “Ultimately, our vision is to create the most respected and admired company in building products distribution,” Gibson says. “We’ve seen over the past two years just how much faster we can go when we’re all moving in the same direction together.”

“We spend a lot of time ensuring that we have alignment with the local management team both from a culture and future expectation standpoint.” —Jim Hooper, VP mergers and acquisitions, US LBM

Maintaining and building new legacies

US LBM looks to enhance the abilities and culture of its associates and businesses.

US LBM President and CEO L.T. Gibson says the company strives to enhance the work of its local leaders and teams.

This includes the everyday service and support of customers by providing its divisions and companies with the right tools, resources, expertise, and financial needs so that they can be successful and win in their local markets. “The buying power and national strength of US LBM are important and help acquisitions with access to new products or lines they couldn’t carry before,” Gibson says. “We have dedicated internal teams that support new businesses through technology, human resources, recruiting, purchasing, and finance that help provide local leaders the ability to focus on their market and customers more directly.”

Although the advantages of US LBM’s systems and buying power are important, the company looks for its acquisition partners to bring something new to the table too. Whether it’s a new capability, a new market, and territory or complimenting a market where US LBM has an established presence but is looking to do more. Gibson notes that when US LBM acquired American Construction Source in July, the move brought much more to the table than an additional 70-plus locations.

“We added in key markets while we were able to augment our supply chain organization and model, which was one of the real value adds for us through the acquisition,” Gibson says.

US LBM is also focused on the people who join the company through acquisitions. “It’s not just helping new acquisitions fill key positions, but helping them to cultivate and grow their existing team members through our suite of training programs,” says Wendy Whiteash, chief human resources officer and executive vice president, culture, at US LBM. Training includes US LBM’s Yellow and Green Belt Lean Six Sigma programs and “Pulse,” which is a year-long training program for the organization’s next generation of top leaders. The latest edition of Pulse was launched in December and more than half the class of 24 participants are from divisions that weren’t part of US LBM 15 months ago.

“We are one company. So when businesses join US LBM, that also gives new associates more opportunities to grow in their careers,” Whiteash says. “If they’re in a specialist support role, now they have a path forward where they may have the opportunity to not just support one business, but perhaps a market or region. Or if they’re on a leadership track and their home division doesn’t have an opportunity for them to progress, with our nationwide network, there might be an opportunity for them to move into another division.”