Builders FirstSource is making good on its plans to focus on acquisitions during what it sees as a declining homebuilding market.
The Dallas-based homebuilder and supplier has acquired Trussway, a Houston-based supplier of roof and floor trusses. The company declined to provide the price of the deal, the Dallas Morning News reported.
Trussway, founded in 1972 by Dick Rotto, has 1,000 employees nationwide across six manufacturing facilities. Its new parent company operates in 42 states with about 30,000 employees across 560 locations.
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After an impressive start to the year — doubling its year over year earnings — Builders FirstSource announced it would pull back from homebuilding operations and focus on acquisitions. Before the Trussway deal, the company had spent $230 million of the $500 million it plans to invest on acquisitions in 2022.
“Our industry is clearly experiencing pockets of deceleration; we’ve all seen mortgage rates rising, single-family starts forecasts coming down in the back half of this year and cancellation rates increasing,” said Builders FirstSource CEO Dave Flitman on an earnings call last month.
Other deals include the $180.5 million acquisition of building component manufacturers Panel Truss and Valley Truss earlier this year and HomCo, a lumber and hardware supplier in Flagstaff, AZ.
It’s true that some Texas markets have seen a slowdown in home starts — especially in some red-hot North Texas suburbs. In the first half of 2022, the number of single-family building permits in Frisco plunged 40 percent compared to the same period last year.
But the Lone Star Star State — including the Dallas-Fort Worth metro overall — remains a robust market compared to the rest of the nation. Texas has four of the top 10 U.S. markets for housing starts, according to a ranking from real estate data firm Zonda. In fact, Dallas-Fort Worth ranked number one in the nation, followed by Houston in second place. Austin ranked fifth and San Antonio was seventh.
— Maddy Sperling