Patrick Industries has acquired Arran Isle and subsidiaries, including its LaSalle Bristol operations from Arran Isle Limited. LaSalle Bristol is a supplier of plumbing, flooring, tile, lighting, air handling, and building products to the manufactured housing, RV, and industrial markets.
The purchase price was approximately $54 million, including working capital of approximately $34 million. Patrick will continue to operate LaSalle Bristol on a stand-alone basis under its brand names in its existing facilities.
“LaSalle Bristol’s well-established brands, product lines, and customer relationships have been built upon quality service and reliability for decades, and highly complement our MH and RV product portfolio,” said Todd Cleveland, chairman and CEO of Patrick. “In addition, the acquisition of LaSalle Bristol provides us with an excellent opportunity to further leverage both companies’ distribution capabilities and capacity, and increase our content per unit within the MH and RV markets. This acquisition is aligned with our strategic initiatives and capital allocation strategy and we look forward to partnering with the LaSalle Bristol team to increase our value proposition to our customers.”
LaSalle Bristol is headquartered in Elkhart, Ind., and operates a nationwide network of 11 distribution centers, one manufacturing facility, and three combined manufacturing facilities and distribution centers, all of which are strategically situated across North America in close proximity to MH and RV manufacturing facilities.
LaSalle Bristol’s trailing 12-months revenue through October was approximately $230 million, with approximately 58 percent and 39 percent of the revenues, or $1,340 and $180 content per unit attributable to the MH and RV markets, respectively. The company expects the acquisition to be immediately accretive to net income per share. Additionally, as LaSalle Bristol derives a majority of its revenues from distribution activities, Patrick expects the acquisition to be initially dilutive to consolidated operating margins by approximately 50 basis points. However, the company believes there are significant annual operating synergy opportunities of approximately $4 million to be realized within the first 12 to 18 months post-closing.
“We are excited about the opportunity to increase our presence in the MH industry, which we believe has significant growth potential based on favorable fundamental industry characteristics, strong consumer confidence, increasing wages and jobs growth, and the lack of available affordable single-family housing options,” said Andy Nemeth, president of Patrick. “Wholesale unit shipments for the MH industry, which have grown at a compound annual rate of approximately 11 percent over the last five years, still remain well below peak historical levels. Similar economic trends and attractive demographics continue to support strong demand in the RV market. We are looking forward to driving additional growth as a key component supplier through high-quality product solutions.”
The acquisition of LaSalle Bristol includes the acquisition of accounts receivable, inventory, prepaid expenses, real estate, and machinery and equipment, and was funded under the company’s credit facility.
