Beacon Roofing Supply, Inc. (NASDAQ:BECN) Q3 2022 Earnings Call Transcript

Julian Francis: I will let Frank take that last one again too, but the pipeline is robust. We are active. We managed to do five in the last 12 months or so in terms of acquisitions. Two of them fit nicely into that sort of $50 million to $250 million range of revenue midway, obviously, was a great one for us in Kansas City. And obviously, Coastal changes our entire footprint in the waterproofing business, which we think is going to be a great category for us going forward. Look, we are very active. I would tell you that I think that in terms of multiples, we told you at Investor Day, and we continue to say that we are looking to get these transactions done at a multiple, synergized multiple is below our trading multiple. And we believe that we can continue to deliver on that promise and continue to be both active in the marketplace and also competitive in the marketplace.

Frank Lonegro: Hi Truman, just in terms of dimensionalizing things, let me hit you with revenue and then let you imply your own EBITDA. But the combination of the Midway acquisition, the acquisition, the Wichita Falls acquisition and the Crabtree acquisition. Obviously, except for Midway, those are fairly small acquisitions. You are in the $120 million, $125 million range in terms of annualized. I will say, years zero revenue, so what we bought. All of those companies have done quite well under our ownership. So, the numbers obviously on a going-forward annualized basis, post Beacon acquisition, are higher than that, a combination of better execution, better pricing, better margin. And certainly, the inflation has been helpful there. And then if you tack on the Coastal on top of that at $250 million, if you can use a broad average of the 10% number, and you will get close to where we are from an EBITDA perspective across those acquired companies.

Operator: Thank you. Our next question comes from the line of Stanley Elliott with Stifel. Your line is now open.

Stanley Elliott: Hey guys. Thank you, guys for fitting me in. A quick question kind of back on Coastal, it sounds like a great fit. You had the similar business out in the West Coast. It sounded to me like you are thinking about expanding the Coastal business kind of in a similar greenfield strategy, what you are doing with some of your other branches. One, did I hear that correctly? And then two, maybe a little color, what’s changed, I guess now? Is it just the scale that you have on a national footprint of why you want to pursue the strategy since you did have those assets from several years ago out West?

Julian Francis: Thanks for the question. So, let me try and sequence this properly. So, first of all, from a strategy standpoint, this was something that we needed to get the timing right in terms of the acquisition. From our standpoint, Coastal was foundational in terms of our strategy to expand the waterproofing footprint, as I said. I believe that when we have repositioned the portfolio, we were very conscious about our decision to maintain our waterproofing business. We think it’s a great business. We wanted to make sure that we could expand it on a national basis. And this €“ we wanted to get the sort of the Keystone acquisition. I would say the Coastal acquisition was foundational in that. We believe that, that was critical to our path forward, obviously, strong technical, great leadership, East Coast locations.