Builders FirstSource and BMC Reboot Waiting Period for Merger

October 21st, 2020 by Drew Vass, Executive Editor

After announcing plans for an all-stock merger transaction with BMC Stock Holdings Inc. (BMC), officials for Builders FirstSource (BFS) restarted the period for merger review last week by voluntarily withdrawing and refiling notification with the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC). The two companies entered into an Agreement and Plan of Merger August 26, 2020. On September 10, they filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with the DOJ and FTC. Last Tuesday, BFS filed a notice with the Securities and Exchange Commission (SEC) announcing that, in consultation with BMC, the company voluntarily withdrew its HSR Notification, only to refile two days later on October 15. The new waiting period for the Refiled Notification is scheduled to expire on November 16, 2020. Both parties say they still expect the Merger to close in late 2020 or early 2021, as originally planned.

“The refiling doesn’t appear to be substantive or indicative of a problem with the deal,” says Michael Collins, managing director for Building Industry Advisors LLC, an expert in mergers and acquisitions who isn’t associated with the deal. “Instead, it’s a fairly common step taken in mergers that are subject to HSR rules, in order to balance the required HSR notification windows with the timeframe within which the parties intend to close the pending transaction.”

After a 90-day transition period following the completion of the merger, current CEO of Builders FirstSource, Chad Crow, will retire and will be succeeded by David Flitman, current CEO of BMC, serving as CEO of the combined company.

After the merger, BFS and BMC, along with their respective subsidiaries, will operate as one combined company under the name Builders FirstSource Inc. According to the terms of the agreement, Boston Merger Sub I Inc., a wholly owned subsidiary of BFS, “will merge with and into BMC … with BMC surviving the merger as a wholly owned subsidiary of Builders FirstSource.” According to SEC filings, immediately following completion of the merger, shareholders of BFS common stock will hold, in the aggregate, approximately 57% of the issued and outstanding shares of BFS common stock. Shareholders of BMC common stock will hold, in the aggregate, approximately 43% of issued and outstanding shares of BFS common stock on a fully diluted basis, also based on the number of shares of BFS common stock and BMC common stock outstanding October 2, 2020.

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