April 16, 2018 Volume xxiv, #15

“Love is a canvas furnished by nature and embroidered by imagination.”
—Voltaire (French writer, essayist, and philosopher, 1694-1778)

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Acquisition of Titan by U.S. gypsum dealer could pave the way for further takeovers

TUCKER, Ga. — A U.S. gypsum supply dealer is buying up this country’s largest GSD network, and it’s not likely to stop there. GMS Inc., a distributor of wallboard and suspended ceilings systems based in Georgia, has announced its intention to acquire 100% of WSB Titan. The deal is worth about US$627 million ($800 million).

Titan, which is headquartered in Vaughan, Ont., just north of Toronto, serves the residential, commercial, and institutional markets with wallboard, insulation, lumber, roofing, steel framing, and other complementary building products. It originally represented a partnership of Watson Building Supplies in Vaughan, Shoemaker Drywall Supplies, based in Alberta, and Le Groupe Beauchesne in Quebec.

Beauchesne itself is not to be part of this deal. It remains a shareholder in Titan, but is not part of the sale to GMS. It will, however, remain part of Titan and that group’s negotiations with vendors going forwards.

Titan grew further in 2015 with its first foray into the retail side, through the acquisition of Slegg Building Materials, a family-run building supply dealer with a dozen stores on Vancouver Island. Not counting the five Groupe Beauchesne locations, it now has 33 outlets across the country, which includes B.C. Ceiling Systems, a ceiling products distribution business with two sites in British Columbia. Titan’s sales in 2017 were $585 million in 2017, not including Beauchesne.

Under the terms of the agreement, GMS will acquire 100% of the equity interests of Titan for approximately $US627 million ($800 million) from Titan’s current management and private equity firm TorQuest Partners. The existing Titan management will roll over $35 million of their current ownership position into GMS stock. GMS head Mike Callahan will continue to serve as president and CEO of the combined company. Titan President Doug Skrepnek will become president of GMS Canada, reporting to Callahan.

Callahan expects the Titan acquisition to expand the company’s footprint into Canada and establish it as a truly North American operator. He also foresees the opportunity for further acquisitions and greenfields expansion north of the border, which he calls a “highly fragmented market”. And he expects to pick up some of the best practices within Titan to share with the rest of the company.

With the Titan takeover, GMS will have 240 locations across 42 U.S. states and five Canadian provinces, representing $3 billion in sales.

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BMR supports Maritime expansion with online initiatives

BOUCHERVILLE, Que. ― Groupe BMR has invested $10 million over the past two years on upgrading its e-commerce capabilities. According to Pascal Houle, CEO of BMR, the retail group is getting ready to launch a next-generation platform in the coming weeks that will be completely transactional.

The move is part of an overall initiative to support growth for the buying group and wholesale distributor outside its home province of Quebec. The company has been especially active in the Maritimes, where it has most recently signed Matériaux Parent, a dealer with two building centres, in Saint-Quentin and Kedgwick, N.B. Effective April 19, they will join the BMR network, bringing the number of BMR stores in New Brunswick to 11.

Pierre Parent, second-generation owner of the family business, decided to make the change after operating under a competing banner for 18 years.

Driving the expansion efforts is Pierre Nolet, a former dealer himself, who has, since June 2017, held the title of vice-president of business development at BMR. “Our entire team is pleased to be able to count on a dealer like Matériaux Parent,” says Nolet.

A third store in New Brunswick is also in the works, this one in Caraquet. Owner Michel Chiasson’s operation will be a BMR Express hardware store, with a grand opening scheduled for May.

Nolet says BMR is paying close attention to combining bricks and mortar with a more expanded online presence. The ability of shoppers to buy online will be a huge step forward for BMR and an important support for its dealers. Those stores, in turn, can serve as pickup points for online purchases.

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Richelieu’s Richard Lord talks about the importance of design, growth

MONTREAL — Over the past 50 years of Richelieu Hardware’s existence, the company has seen growth from new product innovation that has helped elevate the level of sophistication of products as simple as kitchen cabinet knobs and drawer pulls.

The reason for the change? Design has played a big role, says Richelieu President and CEO Richard Lord. The nature of product design has gotten more sophisticated, and consumers’ expectations have risen, through the years. But this is another area, he points out, where Richelieu has an edge. Its designers and product managers are constantly searching for the latest in product innovation and design trends. “We have huge financial resources to buy the best products from here and from around the world.”

The company has been actively making acquisitions and in recent years most of them have been manufacturing facilities that feed into Richelieu’s commercial side. But it still dominates on the retail side, through the Richelieu brand, as well as Onward Hardware and Reliable Fasteners. “We have the most outstanding decorative hardware program in the world,” says Lord.

His ambition was to see those programs sold in every hardware, building supply, and big box store in the country. He’s confident that at least 95% of them now do, driven by Richelieu’s own sales force, rather than outside sales agencies.

Finally, Lord explains why Richelieu remains a distinctly Canadian company. “The share price is strong, currently at about 20 times EBITDA, so it would be hard to acquire,” he notes. “And we never gave the market any indication that we want to sell. Our interest for the time being is not to sell, but to grow.”

(Part one of our interview with Richard Lord appeared in last week’s edition. —Editor)

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Housing update: Toronto cools off as Western markets heat up



TORONTO & KELOWNA, B.C. ― One-quarter of Canadian homebuyers say they feel pinched by changes to Canada’s mortgage lending rules, which includes a “stress test” to ensure that first-time homebuyers could withstand increases to mortgage interest rates. However, projections for the spring market show optimism, with most markets expected to remain stable or improve.

These are just some of the findings of a new survey conducted by Leger on behalf of real estate organization Re/Max.

House prices in the Greater Toronto Area have actually fallen almost 10% from the first two months of 2017, and prices are expected to continue softening throughout the year. At the same time, the average residential sale price in Western Canada continues to increase, apparently less impacted by the stress test rules than in Eastern Canada. Greater Vancouver saw prices increase almost 11% in January and February to $1,051,513, up from $950,184 during the same period in 2017. Victoria has also seen an increase in average residential sale price, which was $831,000 in January and February this year compared to $761,000 during the same period in 2017.

In Alberta, first-time homebuyers looking for affordability in Calgary and Edmonton continue to drive the market, with single millennials and young couples gravitating toward the condominium market, which the Re/Max report says is relatively stable. The average residential sale price increased 1.4% in Calgary to $481,775 in January and February of this year, up from $475,288 in 2017. In Edmonton, by comparison, more housing inventory has resulted in a small increase in activity and more stable year-over-year prices going in to 2018.

Activity in Atlantic Canada experienced increased demand from first-time homebuyers, many of whom are young couples and families. At the same time, the condo market is being driven by retirees who are looking to downsize. Prices continue to rise across most Atlantic markets, especially in Saint John where the average residential sale price in January and February this year was $201,328, compared to $168,956 during the same period in 2017.

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At Jeld-Wen Inc., Brian Glen has been promoted to the role of national account manager – buying groups, reporting to Adrienne Burgess, VP sales – Canada. Brian joined Jeld-Wen in 2016 and has more than a decade of industry sales experience across Canada, including 14 years with Alexandria Mouldings. He brings to the role a knowledge of windows, doors, and mouldings, combined with an understanding of Canadian buying groups and their dealers. (bglen@jeldwen.com)

Also at Jeld-Wen, Candace Kane has been appointed national sales manager for Lowe’s and RONA. She brings more than a decade of sales experience in the home improvement industry, including stints at Stanley Black & Decker, CGC, and National Concrete Accessories, and also reports to Burgess. (ckane@jeldwen.com)

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CLASSIFIED ADS

REGIONAL BUSINESS DEVELOPMENT DIRECTORS WANTED 

RONA AND ACE CANADA ARE LOOKING FOR REGIONAL BUSINESS DEVELOPMENT DIRECTORS IN WESTERN CANADA, ONTARIO, QUEBEC, AND ATLANTIC MARKETS 

• Help continue to build our strong dealer network and marketshare 

• Create strategies and direction for regional development 

and long-term growth 

• Identify and develop and develop business opportunities including new investors, existing dealer expansion, conversion prospects and acquisitions 

• Strong selling, interpersonal and communication skills required 

• Must be able to build relationships with prospective customers 

• Retail experience and understanding of the dealer market preferred 

FOR MORE INFORMATION, VISIT : rona.ca/career-rona-ace

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Nite Ize, Inc. is looking for a Key Account Manager to fill an opening immediately in Canada, based in the Greater Toronto area.  The qualified candidate will have a background in sales and a BA is preferred, 4+ years of manufacturing sales experience and a proven track record of success.  Please see the complete job description and apply on our website click here.

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Key account Manager
Davidson sales and marketing a national sales agency with over 40 years in the LBM / Hardware market is  searching for a seasoned senior representative to call on Quebec and Atlantic hardware dealer head offices such as Patrick Morin, Canac, Kent, Bonhomme, Materiaux Laurentien and independent distributors for major brands.  If you want to join a winning team and have a entrepreneurial spirit we will provide you with the challenges and the tools for you to succeed. 
Please apply at: keyaccount@jobposition.ca

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