Newsmaker of the Year

Home Channel News, Jan 10, 2000

In 1919,the journalist John Reed wrote "Ten Days that Shook the World" about the Russian Revolution. Eighty years later, BSL HOLDINGS staged its own insurrection that might be titled "14 days that shook up the home improvement industry." Over a two-week period in June, BSL Holdings, the Dallas-based operating division of Stonegate Resources, went on an acquisition rampage by agreeing to buy five retail operations.

On June 17, the dealer bought Jacksonville, Fla.-based, 45-year-old Holmes Lumber, with two yards and three truss plants that generated $72 million in 1998. One week later, on June 24, BSL purchased Arlington, Texas-based MBS Holdings, whose four yards did $120 million in 1998. On June 28, it acquired Columbia, S.C.-based Bagnal Builders Supply, with 1998 sales of $20 million. A day later BSL signed a letter of intent to buy Paty Co., a multi-unit dealer in Tennessee and western Virginia. And then a day after that, BSL acquired Durham Manufacturing, a single-unit pro dealer based in the Nashville, Tenn., suburb of Gallatin.

BSL wasn't finished, however. On July 14 it entered the Denver market through the purchase of two-yard Kellogg Lumber. But its greatest coup was an agreement that came the following month when it agreed to acquire East Brunswick, N.J.-based Blackstone Company, the industry's 48th-largest retailer in 1998 with five yards and $146 million in sales that year. In late 1999, Blackstone changed its name to the Northeast division of Builders FirstSource, a banner under which BSL will now run its current and future store operations that, after the Blackstone deal, numbered 79 with annualized sales exceeding $1.5 billion.

In 2000, Builders FirstSource promises to continue expanding, although more than a few industry observers believe the company's officials, led buy chairman John Roach, are more intent in positioning it for going public than they are in running it long term. And until it goes public, some competitors can always raise doubts about the profitability of this dealer network.

It is undeniable, though, that this company's presence has lit a fire under several other pro dealers -- national competitors such as Carolina Holdings, Lanoga and BMC West, as well as regional players Foxworth-Galbraith, Strober Organization, Hope Lumber & supply, Anderson Lumber and Parr Lumber -- to move faster on whatever remaining independent yards, manufacturing plants and component facilities haven't been claimed yet. Carolina Holdings in particular stepped up its acquisition drive when it agreed to buyTerry Cos., one of the strongest regional pro dealers in the country, with 24 yards and $243 million in 1998 sales.