Private equity firm acquires controlling interest in Stock Building Supply
Posted May 6, 2009 6:34 a.m. EDT
Updated May 6, 2009 9:10 a.m. EDT
Raleigh, N.C. — Stock Building Supply Holdings, one of the world’s largest home building supply providers, has a new owner.
The Gores Group, a private equity firm based in California, has purchased 51 percent ownership of Raleigh-based Stock from Wolseley PLC. As part of the deal, Gores Group is pouring $75 million into Stock.
Wolseley decided to sell Stock as the new home building market in the U.S. melted last year. The U.K. based company retains 49 percent ownership and also will provide $100 million in financing to Stock.
As part of the acquisition, Stock also filed for Chapter 11 bankruptcy. The company said all debts would be paid.
“We are very excited about today’s announcement and look forward to working with Gores to develop the business,” said Stock President Joe Appelmann in a statement. “Gores’ strong operational expertise and focus will help position the company during this unprecedented downturn and to outperform the market.”
On March 6, Stock said Wolseley would “pursue a sale or joint venture, or to dispose of or otherwise exit Stock Building Supply, by Aug. 1.”
"After conducting a thorough evaluation, it was determined that a partnership with Gores would be most beneficial for Stock’s employees, vendors and customers," Stock said in its announcement. "Given its confidence and support for the business, Wolseley will retain a 49 percent interest in the business."
The decision to sell Stock is part of a recapitalization plan by Wolseley.
Stock employs some 1,400 people in North Carolina, including 930 in the Triangle, according to Waters. The company has been cutting jobs and closing operations in recent months as the U.S. economy slowed and the housing market crashed.