HERNDON, Va. - Beacon (NASDAQ:BECN), a Fortune 500 company and a leading distributor of roofing and exterior building products, has announced the completion of its acquisition of Chicago Metal Supply & Fabrication, Inc. The acquisition, which brings a family-owned architectural sheet metal fabrication business into Beacon's portfolio, is aimed at enhancing the company's metal solutions capabilities in the Chicago region.
Chicago Metal Supply, established in 2011 and located in Chicago's Hanson Park neighborhood, is known for its custom architectural sheet metal work across commercial, residential, and historical restoration projects. Alina Bosak, President of Chicago Metal Supply, expressed enthusiasm for the acquisition, highlighting the potential to expand the company's product catalog and introduce digital platform options to better serve its customer base.
Larry Augello, Beacon's Regional Vice President, North Central, praised the Bosak family for their business's reputation and the quality of work they deliver. He emphasized the acquisition as a step that will strengthen Beacon's commercial and residential metal offerings in the area.
Beacon's strategic move to acquire Chicago Metal Supply is part of its larger growth strategy, which includes expanding its footprint through acquisitions. The company has reported exceeding its Ambition 2025 revenue and shareholder return targets in 2023 and is focused on meeting its overall strategic goals.
Founded in 1928, Beacon operates over 570 branches across all 50 states in the U.S. and 7 provinces in Canada. The company serves a large customer base and offers products for various stages of the project lifecycle. Beacon also provides a digital account management suite, Beacon PRO+, to help customers manage their businesses online.
This latest acquisition by Beacon reflects its commitment to driving growth and expanding its service capabilities in the building materials market. The integration of Chicago Metal Supply is expected to bolster Beacon's product and service offerings, further solidifying its position in the industry. Information about this acquisition is based on a press release statement.
In other recent news, Beacon Roofing Supply (NASDAQ:BECN)'s Q2 sales report showed a 6.8% year-over-year increase, primarily due to higher average selling prices in the residential sector and consistent demand in the non-residential repair and remodel segment. However, the report did not meet market expectations, leading Stephens to adjust its price target for Beacon from $107 to $95. Despite a decline in residential volumes, Beacon's sales guidance for CY24 increased based on stronger-than-expected commercial demand.
The company's adjusted EBITDA for the quarter missed targets due to significant operational expenditure deleveraging, narrowing the forecast range for CY24 adjusted EBITDA downward. In addition, Beacon completed the acquisition of Passaic Metal and Building Supplies Co., enhancing its service offerings in New Jersey and New York. This follows the acquisition of SSR Roof Supply Ltd., which bolsters Beacon's presence in Vancouver, British Columbia.
Beacon reported record quarterly sales of nearly $2.7 billion in Q2 of 2024, marking a 70% increase year-over-year. This growth was seen across all three lines of business. The company's digital sales also saw a notable increase, growing approximately 22% year-over-year. Despite a negative operating cash flow in the quarter, Beacon expects stronger cash generation in the second half of the year and projects around $750 million in free cash flow for the latter half. These are the recent developments from Beacon Roofing Supply.
InvestingPro Insights
Beacon (NASDAQ:BECN), while expanding its operational footprint through strategic acquisitions like Chicago Metal Supply, showcases mixed financial signals that could be critical for investors to consider. According to InvestingPro data, Beacon has a market cap of approximately $4.96 billion, a testament to its significant presence in the roofing and building materials distribution sector. Despite not being profitable over the last twelve months, analysts are optimistic about Beacon's future, predicting the company to turn profitable this year, as noted in one of the InvestingPro Tips.
From a financial perspective, Beacon's revenue has shown solid growth, with a 9.86% increase in the last twelve months as of Q2 2024. This growth is indicative of the company's successful expansion efforts and could be further bolstered by the recent acquisition. Additionally, the company's gross profit margin stands at a healthy 25.57%, reflecting efficient cost control and a strong market position.
An InvestingPro Tip that stands out is the aggressive share buyback management has been engaging in, which could signal confidence in the company's value and future prospects. This is particularly relevant as the stock price has experienced notable volatility and a significant drop over the last three months. The current price is at 76.12% of its 52-week high, showing there might be room for growth as the company aims to achieve profitability and continue its growth trajectory.
For those interested in deeper analysis, there are additional InvestingPro Tips available, including insights into earnings revisions by analysts and the company's liquidity position. Investors can explore these further to gain a comprehensive understanding of Beacon's financial health and strategic direction.
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