Builders FirstSource to buy BMC Stock for about $2.5 bln

Adds details on deal, background

Aug 27 (Reuters)U.S. residential building materials maker Builders FirstSource Inc BLDR.O said on Thursday it has agreed to buy BMC Stock Holdings Inc BMCH.O in an all-stock deal that values the smaller rival at about $2.5 billion.

The announcement comes on the heels of a strong recovery in the U.S. housing market from the crippling economic fallout of coronavirus-induced lockdowns.

U.S. homebuilding accelerated by about 23% in July, the most in nearly four years, up from a 17.3% rise in June, data from the Commerce Department showed last week.

BMC shareholders will receive 1.3125 shares of Builders FirstSource stock for each BMC share, implying a value of $36.63 per BMC share. That represents a nearly 14% premium to BMC’s last close of $32.22.

The companies, which manufacture floor trusses, roof trusses, wall panels, stairs, windows and doors, will have a combined market capitalization of $5.44 billion based on Wednesday’s close.

Shareholders of Builders FirstSource and BMC will own about 57% and 43% of the new company, respectively, with the deal expected to close in late 2020 or early 2021, the companies said.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Aditya Soni)

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