Homebuilding provider Builders FirstSource buys a North Texas truss maker
Posted On March 1, 2023
The largest materials supplier to homebuilders in the U.S. bought a North Texas truss manufacturer this month, continuing its multibillion-dollar acquisition streak.
Dallas-based Builders FirstSource acquired Noltex Truss on Feb. 1 for about $83 million, according to a filing with the U.S. Securities and Exchange Commission. Noltex has about 400 employees, Builders FirstSource senior vice president of investor relations Michael Neese said in an email.
“This tuck-in acquisition further extends our leading position in value-added products across the state,” newly appointed Builders FirstSource chief executive officer Dave Rush told investors Tuesday.
Brothers Travis, Jason and Joe Nolte established Noltex Truss in April 1999 when they purchased a small, residential-only truss plant in Gatesville, originally known as NB Roof and Floor Trusses, according to Noltex’s website. The company serves the multifamily, commercial and residential construction markets in Texas, Oklahoma and New Mexico.
“With an entrepreneurial, steadfast vision to grow Noltex Truss into a large, multi-location, multi-vertical construction truss manufacturer, Noltex Truss has endured not only a humble, one-location beginning but has persevered through many industry challenges and has evolved into a successful, competitive industry front-runner,” the company’s website says.
Despite the changing housing market and a slowdown, Rush said the company aims to invest an average of $500 million annually in mergers and acquisitions for the next several years.
“Although the M&A pipeline has slowed in the current macro[economic] environment, we continue to be acquisitive, while remaining disciplined in our approach,” Rush said.
The company has been on an acquisition streak since August 2020, when it bought rival BMC Stock Holdings Inc. of Raleigh, N.C., for nearly $2.5 billion. In 2021, the company completed $1.2 billion in acquisitions. Since the beginning of 2022, the company has made $722.3 million in acquisitions, according to the SEC filing.
Builders FirstSource also acquired Pima Door & Supply and Sunrise Carpentry in the Phoenix area in October. The companies saw about $10 million in sales in 2021.
The News reported in September that the company bought Trussway, a Houston-based floor and roof truss manufacturer. Also in September, the company acquired Fulcrum Building Group, which operates lumberyards and millwork facilities along the Gulf Coast in Florida and Alabama.
Builders FirstSource supplies homebuilders with raw materials and prefabricated components, such as lumber, windows, doors, roof trusses, wall panels and stairs. It has 569 locations in 42 states. It closed out 2022 with over $22.7 billion in sales, a 14% increase over 2021. Its annual profit rose to $2.7 billion, up 59%.
The company projects $3.4 billion to $3.7 billion in net sales in the first quarter amid challenges in the housing markets due to mortgage rates and economic uncertainty. That would be a 35% to 40% decrease from its $5.7 billion in net sales in the first quarter of 2022, which marked a 36.1% increase from a year before.
“We believe the long-term outlook for the housing industry is positive and that the housing industry remains underbuilt due to growth in the underlying demographics compared to historical new construction levels,” the company said in its annual report. “However, rising interest rates and inflation may dampen near-term housing industry demand as homes become less affordable for consumers, investors and builders.”