BMC, a national building materials company founded in Boise that still has about 160 employees in the city, is merging with another building-materials business.
BMC said this week that it will merge with Stock Building Supply Holdings Inc., in Raleigh, N.C., in a deal that will leave BMC CEO Peter Alexander in charge of the combined companies.
A BMC spokesman declined to say Wednesday whether Idaho employment levels would be affected. BMC expects the combined company “to maintain a significant presence in Idaho,” said Michael Freitag, of Joele Frank, a New York public relations firm.
The combined company, which hasn’t yet been named, is valued at $1.5 billion and reported 2014 sales of more than $2.7 billion, according to a news release.
The combined company will have building materials stores in 17 states that will continue operating under their current names. BMC has five sites in Idaho: corporate offices at 720 Park Blvd. in Boise, a lumber and building materials store with a truss and panel plant at 11670 W. Franklin Road in Boise, another store in Twin Falls, a truss plant in Idaho Falls and a sales office in Pocatello. The Twin Falls, Idaho Falls and Pocatello sites employ 120 people.
BMC and Stock Building Supply make and sell similar products. Alexander said the company intends to grow.
“The combination of our two highly complementary platforms will enhance our ability to provide customers with best-in-class products and services across an expanded geographic footprint,” Alexander said.
BMC shareholders will receive a little more than half of a newly issued Stock Building Supply share for each BMC share they hold. The deal will result in BMC shareholders owning 60 percent of the new company.
The deal still needs regulatory and shareholder approval. Funds affiliated with Davidson Kempner Capital Management and Ravenswood Investment Management collectively own 52 percent of BMC’s stock. Funds affiliated with Gores, Stock Building Supply’s largest shareholder, own about 38 percent of that company’s shares.
BMC traces its origins to Boise Cascade Corp.’s decision in 1987 to sell its struggling building-construction division, which included 20 stores in six Western states that sold mostly to contractors. Several managers borrowed money and bought the division for $44.6 million. They originally named the company BMC (Building Materials Centers) West.
For two decades, BMC grew and prospered, becoming one of the top 10 suppliers of construction materials and services nationwide. But when the housing market crashed in 2007, BMC was hit hard. Its revenues fell 27 percent in 2007 and continued falling afterward. The company had relied heavily on borrowing to finance growth, and it defaulted on more than $290 million owed to senior lenders.
BMC filed for bankruptcy in June 2009. It slashed services and properties. Employment fell to about 4,000 workers, roughly one-fifth of its peak. Sales continued falling in 2010 to $700 million.
But the company emerged from bankruptcy in 2010 and soon began reducing its debt. It opened new centers in Dallas, Denver and Houston. In 2014, employment had grown to more than 5,000.
The company said it moved its headquarters to Atlanta for better airport connections and to expand to the eastern U.S. At the time, BMC’s presence in the East was limited to a mill in Charlotte, N.C.
Stock Building Supply CEO Jeff Rea will serve on the new company’s board of directors.