Carr, Riggs & Ingram Capital Advisors, LLC (CRI Capital Advisors) acted as the sole investment banking advisor to the owners of Bama Truss, Inc. (“Bama Truss” or the “Company”) in the sale of 100% of its assets to Builders First Source, Inc. (NASD: BLDR) (“Builders First Source”).
Bama Truss was one of the leading providers in the Southeastern United States of prefabricated wooden and metal roof trusses and wall panels. The Company originally focused on providing wooden roof trusses, primarily for the residential construction markets. Over time, Bama Truss adapted to serve the commercial and multifamily markets as well. This change enabled the company to gain a strong position in the market for metal and wooden wall panels, in addition to roof trusses.
The Company invested in industry-leading technology including automated and semi-automated saws which cut and stacked lumber to precise dimensions and ordered components in the exact order for maximum productivity on the assembly lines. Along with automated cutting, stacking, and ordering capabilities, the Company employed laser projection tables to ensure accuracy and efficiency throughout the production/assembly phase of the process.
The owners of Bama Truss sought a relatively short-term exit from the business. Pat Shugrue, the primary owner/operator, had surrounded himself with a competent management team and preferred not to engage in a multi-year employment contract to serve as a senior executive with the Company. It was clear to CRI Capital Advisors that the elements essential to a successful transaction would include:
Exceptional valuation indicative of the Company’s stellar reputation, strong financial history and position, and upside growth potential
Immediate and significant liquidity for the owners, with limited or no deal structure that would tie the owners to the business financially or otherwise for the long-term
Relatively immediate exit from the Company; allowing for a maximum 12-month transitional period to support the new owner(s)
Alignment with an acquirer that offered personal and professional opportunities for growth for the key members of management and employees who had contributed to the value and performance of the Company.
CRI Capital Advisors advised the owners as they considered various options and types of acquirers to enable the desired transition path. CRI Capital Advisors prepared a carefully researched list of potential acquirers including financial acquirers (private equity groups, family offices, etc.) as well as strategically aligned companies that seemed positioned to benefit from the potential acquisition. After an extensive process directed by CRI Capital Advisors, through which multiple offers were considered, Builders First Source emerged as the ideal acquirer. Builders First Source offered the valuation and all-cash structure that provided immediate financial security for the owners of Bama Truss. Builders First Source also expressed intent to increase production volumes and create a major distribution point at the Company’s existing site, providing growth opportunities for existing management/employees.
As a publicly traded company, Builders First Source executed an exhaustive due diligence process, which CRI Capital Advisors managed on behalf of the owners of the Company. The transaction closed as scheduled, at the valuation and general terms originally proposed by Builders First Source, and the owners completely exited the Company within a few months following closing.