HDI acquires Mid-Am Building Supply
Hardwood Distribution Inc. (HDI) reported that one of its wholly-owned subsidiaries has entered into an agreement to acquire the assets and assume certain working capital liabilities of Mid-Am Building Supply, Inc. (Mid-Am).
Mid-Am is a wholesale distributor of building products to customers in the U.S. Midwest. The company focuses on pro dealers while providing customers with an extensive portfolio of products and services including doors, millwork, and other diversified building materials.
Founded in 1967, Mid-Am reaches over 1,600 ship-to-customer locations and generated annual sales of over $270 million. Mid-Am’s management team will continue to lead the business and HDI said that it will welcome Mid-Am’s 364 employees.
Mid-Am brings a new local presence in the Midwest to HDI’s existing network of 83 distribution centers.
“We are very pleased to welcome Mid-Am’s capabilities to HDI, which we believe are complementary to our current operations,” said Rob Brown, HDI president and CEO. “This acquisition is a natural geographic extension from our current locations, providing access to customers and markets in the U.S. Midwest that we do not reach today. Mid-Am comes with an experienced team, established customer relationships and a portfolio of specialty and associated products that complement our existing product mix.”
Mid-Am operates five distribution centers with 650,000 square feet of warehouse space serving 10 states. The company will continue to operate under its current name and join HDI’s other operating brands Rugby Architectural Building Products, Hardwoods Specialty Products, Novo Building Products, and Frank Paxton Lumber.
In a prepared statement, HDI said the acquisition was essential to reaching more customers in the pro dealer and home center channels.
“With today’s announced addition of Mid-Am, plus the previous acquisition of Novo, we have achieved additional diversification for our business,” Brown said. “Combined, we have acquired pro forma annual sales of US$950 million in the Pro Dealer and home center customer channels in the last six months. Looking ahead, approximately 60% of our sales mix will be focused on industrial customers, and 40% on Pro Dealer/home center. This customer channel diversity, combined with our national footprint and balanced product portfolio, positions HDI as a one-stop solution for its customers.”
HDI also said that it believes that the Novo and Mid-Am acquisitions are well-timed with respect to the company’s outlook for end markets. HDI noted that it expects favorable multi-year demand for its products from the new residential and repair and remodel markets, supported by low existing home inventories, favorable demographics, historically low-interest rates, rising home equity levels, and aging U.S.housing stock.
The acquisition is expected to close this month. The financial terms of the acquisition were not disclosed.
Based in Langley, British Columbia, HDI currently operates a network in North America of 83 distribution facilities utilizing five distribution brands: Novo Building Products; Hardwoods Specialty Products; the Frank Paxton Lumber Company; and Rugby Architectural Building Products.