April 24, 2018 / 6:06 PM / 3 months ago

Leonard Green to buy building products firm SRS for over $3 billion: sources

(Reuters) - Buyout firm Leonard Green & Partners LP has agreed to acquire SRS Distribution Inc, a U.S. private equity-owned wholesale distributor of building products, for more than $3 billion, including debt, according to people familiar with the matter.

The deal comes amid strong demand for roofing products. Americans are expected to spend nearly $340 billion in 2018 to upgrade or patch up their homes, a 7.5 percent increase from last year, a report by the Joint Center for Housing Studies of Harvard University showed earlier this year.

Leonard Green has signed an agreement to acquire SRS from its owner, private equity firm Berkshire Partners LLC, the sources said on Tuesday on the condition they not be identified because the deal has not yet been announced.

Berkshire Partners declined to comment, while Leonard Green and SRS did not immediately respond to requests for comment.

SRS offers a range of building products including nails, screws, gutters, lumber, paint and other accessories as well as tools. Roofing makes up almost 90 percent of its sales, according to the company’s website.

Berkshire Partners bought SRS from private equity firm AEA Investors Ltd in 2013 for an undisclosed sum. At the time, the company was the fourth-largest residential roofing distributor in the country.

Other companies have also benefited from the strength in the sector. Shares of GMS Inc (GMS.N), the largest independent distributor of specialty building materials in the United States, in which AEA also invested, have risen 49 percent since the company went public in May 2016.

Reporting by Harry Brumpton; Editing by Paul Simao

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