Hardwoods Distribution Inc. (“HDI”) announced that one of its wholly owned subsidiaries has entered into an agreement to acquire substantially all of the assets and assume certain working capital liabilities of Mid-Am Building Supply, Inc. for a total price of $270 million. At closing of the acquisition, the Company will enter into leases of the facilities through which Mid-Am operates. The acquisition will be financed by an expansion of HDI’s existing credit facility.
Founded in 1967, Mid-Am is a leading wholesale distributor of building products to customers in the U.S. Midwest. Mid-Am focuses on home builder distribution yards (“Pro Dealers”), providing customers with an extensive portfolio of products and services including doors, millwork, and other diversified building materials.
The Acquisition is an important strategic addition to HDI’s capabilities in the Pro Dealer and home center customer channel. The Pro Dealer / home center customer channel represents a substantial addressable market opportunity for HDI to capitalize on its deep expertise in architectural building products.
HDI believes that the Novo and Mid-Am acquisitions are well timed with respect to the Company’s outlook for end markets. HDI 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 an aging US housing stock.
HDI is one of North America’s largest suppliers of specialty building products to industrial manufacturers, Pro Dealers, and home centers servicing the new residential, repair and remodel, and commercial construction end-markets.
