* Buys Roofing Supply from Clayton, Dubilier & Rice
* Deal to add immediately to Beacon's adjusted earnings
* Beacon shares up 13 pct in early trading
(Adds background, deal details; updates share movement)
July 27 (Reuters) - Beacon Roofing Supply Inc BECN.O will
buy roofing products distributor Roofing Supply Group in a deal
valued at about $1.1 billion, to expand in key housing markets
of California, Florida and Texas.
Beacon, which has a market value of about $1.5 billion, will
acquire Roofing Supply from investment firm Clayton, Dubilier &
Rice. ID:nBw2pWTMa
Shares of Beacon were up 13 percent at a year high of $33.99
on the Nasdaq in early trading.
U.S. construction suppliers are benefiting from burgeoning
demand with the housing market well into its fourth year of
recovery after the financial crisis.
States in the U.S. south and southwest have led the comeback
in homebuilding, helped by some of the country's strongest job
rates.
As a result of the acquisition, Clayton, Dubilier & Rice
will own about 15 percent of the pro-forma company and will also
have two seats on the board of the combined company, Beacon said
on a conference call. (http://bit.ly/1IBjiow)
The deal will increase Beacon's revenue to about $3.7
billion and give the company greater access to 45 states and six
provinces across Canada, it said. Beacon reported revenue of
$2.33 billion in 2014.
The acquisition of Roofing Supply, which has presence in 24
U.S. states, provides Beacon access to the Pacific Northwest.
The deal will boost Beacon's presence in California by 75
percent and in Texas and Florida by as much as 50 percent, the
company said.
Roofing Supply was acquired by Sterling Group in 2006.
Clayton, Dubilier & Rice bought Roofing Supply from Sterling in
2012.
Dallas-based Roofing Supply, which distributes to
contractors, builders, architects and building owners in the
United States, reported revenue of $1.1 billion for 2014.
The transaction is expected to add immediately to adjusted
earnings, Herndon, Virginia-based Beacon said.
Roofing Supply shareholders will receive about $286 million
in cash and $291 million of Beacon common stock, and Beacon will
refinance about $565 million of Roofing Supply's net debt.
The transaction, expected to close on Oct. 1, is expected to
generate about $50 million in annual run-rate cost synergies.
Beacon said it does not expect clearance issues from
regulatory bodies.