Investing.com - Beacon Roofing Supply Inc (NASDAQ:BECN) shares jumped on Thursday following the company’s announcement that it will buy Allied Building Products Corp. for $2.625 billion in cash.
The transaction is expected to close Jan. 2, 2018, and it will result in the combination of the world’s largest publicly traded distributor of roofing and related products in North America (Beacon) with one of America’s largest exterior and interior building products distributors (Allied). The acquisition will make Beacon one of the largest public wholesale building materials distributors in North America with revenues of roughly $7 billion.
Beacon added that the purchase will immediately boost earnings and expected the combined company to achieve a run-rate of $110 million in annual synergies within two years. The acquisition will be mostly financed through debt.
Beacon said the acquisition will allow the company to expand into the New York, New Jersey and Upper Midwest.
Beacon’s shares were up 9.6% at $43.45 in the final hour of trading on Thursday.