Beacon Roofing Supply (BECN)

Founded in 1928, Beacon Roofing Supply, Inc. (BECN) is one of the three largest roofing materials distributors in the United States and Canada, with more than 90% of its sales coming from the U.S. While Beacon sells roofing materials asphalt shingles and single-ply roofing to the residential and non-residential markets, it also sells complementary building materials such as vinyl siding, doors, windows, insulation, and waterproofing systems. The company operates 176 branches in 35 states in the U.S. states and Eastern Canada, serving more than 40,000 customers. More importantly, no one customer accounts for more than 0.5% of sales. The competition comes primarily from local and regional roofing supply distributors. Local contractors, involved in the business of roof replacement, make up the bulk of its sales.

After having a few owners, seven branches and only $72 million in revenue, BECN was purchased in 1997 by the private equity group, Code, Hennessey, and Simmons. Using this company to consolidate a fragmented industry, the newly managed Beacon acquired nine companies, opened 18 new branches, and expanded revenue to over $850 million by the end of FY05. In September 2004, Beacon went public by selling 8.5 million shares at a price of $13.00 per share. The company used the proceeds to pay down debt and continued active pursuit of external and internal growth through acquisitions and new branch openings. Since going public, the stock price has more than doubled.

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