stock building supply holdings, inc.

STOCK BUILDING SUPPLY HOLDINGS,
INC.
FORM 425
(Filing of certain prospectuses and communications in connection with business combination transactions)
Filed 06/03/15
Address
Telephone
CIK
Symbol
SIC Code
Fiscal Year
8020 ARCO CORPORATE DRIVE, SUITE 400
RALEIGH, NC 27617
919-431-1000
0001574815
STCK
5211 - Lumber and Other Building Materials Dealers
12/31
http://www.edgar-online.com
© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 3, 2015
STOCK BUILDING SUPPLY HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-36050
26-4687975
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
8020 Arco Corporate Drive, Suite 400
Raleigh, North Carolina 27617
(Address of principal executive offices) (Zip Code)
(919) 431-1000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01.
Regulation FD Disclosure.
On June 3, 2015, Stock Building Supply Holdings, Inc., a Delaware corporation (the “ Company ”), and Building Materials Holding Corporation, a Delaware corporation (“ BMC ”),
issued a joint press release announcing the execution of an Agreement and Plan of Merger (the “ Merger Agreement ”), dated June 2, 2015, between the Company and BMC. Pursuant
to the Merger Agreement, subject to certain conditions, BMC will be merged with and into the Company, with the Company surviving the merger (the “ Merger ”). A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In addition, on June 3, 2015, the Company provided supplemental information regarding the Merger in connection with a presentation to analysts and investors. A copy of the
presentation is attached hereto as Exhibit 99.2 and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into
any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified
by words or phrases such as “may,” “might,” “predict,” “future,” “seek to,” “assume,” “goal,” “objective,” “continue,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” or the negative of such terms and other words, terms and phrases of similar meaning.
Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. The Company cautions readers that any forward-looking
statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. Such forward-looking
statements include, but are not limited to, statements about the benefits of the Merger involving BMC and the Company, including future financial and operating results, the Company’s
or BMC’s plans, objectives, expectations and intentions, the expected timing of completion of the transaction, and other statements that are not historical facts. There are a number of
risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. Important factors that could cause actual
results to differ materially from those indicated by such forward-looking statements include risks and uncertainties relating to: the ability to obtain the requisite BMC and the Company
shareholder approvals; the risk that the Company or BMC may be unable to obtain governmental and regulatory approvals required for the Merger, or required governmental and
regulatory approvals may delay the Merger or result in the imposition of conditions that could cause the parties to abandon the Merger; the risk that a condition to closing of the Merger
may not be satisfied; the timing to consummate the Merger; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from
the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers,
employees or suppliers; the diversion of management time on Merger-related issues; general worldwide economic conditions and related uncertainties; the effect of changes in
governmental regulations; and other factors discussed or referred to in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission (“SEC”) on March 2, 2015, and our subsequent filings with the SEC. These risk factors, as well as other risks associated with the Merger, will be more fully
discussed in the Registration Statement and the Proxy /Consent Solicitation Statement/Prospectus (as defined below). All such factors are difficult to predict and are beyond the
Company and BMC’s control. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the
foregoing cautionary statements. All such statements speak only as of the date made, and the Company and BMC undertake no obligation to update or revise publicly any forwardlooking statements, whether as a result of new information, future events or otherwise.
NO OFFER OR SOLICITATION
The information in this communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or
the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
The proposed transaction involving the Company and BMC will be submitted to the respective stockholders of the Company and BMC for their consideration. In connection with the
Merger and special meeting of the Company’s stockholders, the Company expects to file with the SEC a registration statement on Form S-4 (the “Registration Statement”) that will
include a proxy statement/consent solicitation/prospectus (the “Proxy/Consent Solicitation Statement/Prospectus”). The definitive Registration Statement and the Proxy/Consent
Solicitation Statement/Prospectus will contain important information about the Merger, the Merger Agreement and related matters. This communication may be deemed to be
solicitation material in respect of the proposed transaction between BMC and the Company. This communication is not a substitute for the Registration Statement, Proxy/Consent
Solicitation/Prospectus or any other documents that the Company or BMC may file with the SEC or send to shareholders in connection with the proposed transaction. INVESTORS
AND SECURITY HOLDERS OF THE COMPANY AND BMC ARE URGED AND ADVISED TO READ THE REGISTRATION STATEMENT AND THE PROXY/CONSENT
SOLICITATION STATEMENT/PROSPECTUS CAREFULLY WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC AND ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The Registration
Statement, the Proxy /Consent Solicitation Statement/Prospectus and any other documents filed or furnished by the Company with the SEC may be obtained free of charge at the SEC’s
website (www.sec.gov). The Registration Statement, the Proxy/Consent Solicitation Statement/Prospectus and other relevant documents will also be available to security holders,
without charge, from the Company by going to its investor relations page on its corporate website at http://ir.stocksupply.com or from BMC by directing a request to Paul Street,
Corporate Secretary of BMC, via email or telephone ([email protected], (208) 331-4300.
PARTICIPANTS IN THE SOLICITATION
The Company, BMC, their respective directors and certain of their executive officers and employees may be deemed to be participants in the solicitation of proxies in connection with
the proposed transaction. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2015 Annual Meeting of
Stockholders, which was filed with the SEC on April 30, 2015. Information about the directors and executive officers of BMC and more detailed information regarding the identity of
all potential participants, and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and the Proxy/Consent Solicitation
Statement/Prospectus. Investors may obtain additional information regarding the interests of such participants by reading the Registration Statement and the Proxy/Consent Solicitation
Statement/Prospectus when they become available. You may obtain a free copy of the proxy statement for the Company’s 2015 Annual Meeting of Stockholders by going to its
investor relations page on its corporate website at http://ir.stocksupply.com. You may obtain free copies of the Registration Statement, the Proxy/Consent Solicitation
Statement/Prospectus and other relevant documents as described in the preceding paragraph.
ITEM 9.01.
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No.
Description of Exhibit
99.1
Press Release, dated June 3, 2015
99.2
Investor Presentation, dated June 3, 2015
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 3, 2015
STOCK BUILDING SUPPLY HOLDINGS, INC.
By:
Name:
Title:
/s/ C. Lowell Ball
C. Lowell Ball
Senior Vice President, General Counsel and Corporate
Secretary
EXHIBIT INDEX
Exhibit
No.
Description of Exhibit
99.1
Press Release, dated June 3, 2015
99.2
Investor Presentation, dated June 3, 2015
Exhibit 99.1
Stock Building Supply Holdings, Inc. and Building Materials Holding Corporation Announce Merger Creating Premier Building Materials Distribution Services and
Solutions Company
Complementary Businesses Will Create Stronger, More Efficient Competitor Able to Accelerate Profitable Growth
Combination Enhances Geographic Reach in Key Growth Markets Across the United States and Expands Product and Service Offerings
Transaction Expected to Result in Annual Synergies of $30 to $40 Million and to Be Accretive to Stock Building Supply’s Earnings per Share in the First Year Following Closing
RALEIGH, NC and ATLANTA, GA, June 3, 2015 – Stock Building Supply Holdings, Inc. (NASDAQ: STCK) (“Stock Building Supply”) and Building Materials Holding Corporation
(“BMC”), two leading building materials and solutions providers to professional contractors, today announced the signing of a definitive merger agreement under which the two
companies will combine in an all-stock transaction. The combined company is expected to have an implied pro forma enterprise value of $1.5 billion based on Stock Building Supply’s
closing price on June 2 nd .
The transaction will create a premier provider of lumber, diversified building products and construction services with over $2.7 billion in pro forma 2014 revenues and enhanced
product and service offerings. The combined company will have expanded geographic reach in attractive, fast-growing regions across the United States, innovative technology
capabilities and deep industry expertise to drive profitable growth and provide leading customer service.
Among the numerous benefits the combined company is expected to bring to all stakeholders include:
•
An enhanced growth, margin and return profile.
•
A strong balance sheet and significant cash flow to support long-term strategic growth in a highly fragmented industry.
•
Significant and achievable synergy potential rising to $30 - $40 million annually within two years.
•
An expanded footprint from 21 to 42 metropolitan areas, principally in the fast-growing South and West regions.
•
A shared deep commitment to providing solutions to customers while delivering a broad range of quality products and services.
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•
Projected accretion to Stock Building Supply’s earnings per share in the first full year following close of the transaction.
“We expect this compelling strategic merger will provide significant benefits for customers, shareholders, suppliers and associates of both companies,” said Jeff Rea, President and
Chief Executive Officer of Stock Building Supply. “The continuing recovery of the U.S. housing market is expected to generate strong demand for building materials, services and
solutions, and together we believe BMC and Stock Building Supply are better positioned to capitalize on this opportunity. Upon close of this transaction, I look forward to continuing
on our board to support the combined company and have great faith in the combined leadership team’s ability to create significant shareholder value by accelerating the implementation
of our common strategies.”
Peter Alexander, BMC’s Chief Executive Officer, said, “We are very pleased to be uniting two leading companies with complementary strategies, products and services; a shared
commitment to superior customer experiences; strong internal performance-based cultures and operations in high-demand geographies. The combination of our two highly
complementary platforms will enhance our ability to provide customers with best-in-class products and services across an expanded geographic footprint. We have great respect for
what the team at Stock Building Supply has accomplished and upon close of this transaction, I look forward to leading the combined team as we enter the next exciting phase of our
transition and the ability to fund our growth.”
Transaction Terms
Under the terms of the agreement, which has been unanimously approved by the Board of Directors of both companies, BMC shareholders will receive 0.5231 newly issued Stock
Building Supply shares for each BMC share. Upon the closing of the transaction, BMC shareholders will own approximately 60% of the merged entity, with Stock Building Supply
shareholders owning approximately 40%. The transaction is structured to be tax-free to the shareholders of both companies, and is expected to close in the fourth quarter of 2015,
subject to approval by both Stock Building Supply and BMC shareholders and typical regulatory clearances.
Funds affiliated with Davidson Kempner Capital Management LP, Ravenswood Investment Management and MFP Partners, L.P., which collectively own approximately 52% of
BMC’s outstanding common stock, and funds affiliated with Gores, Stock Building Supply’s largest shareholder, which own approximately 38% of Stock Building Supply’s
outstanding common stock, have each agreed to vote in favor of and fully support the transaction.
Proven Leadership Team
Upon closing of the transaction, BMC Chief Executive Officer Peter Alexander will serve as Chief Executive Officer of the combined company and will be a member of the Board of
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Directors. Jeff Rea, the current Stock Building Supply President and Chief Executive Officer, will remain a member of the Board of Directors of the company. The new leadership team
is expected to include representatives of both companies, with current Stock Building Supply Executive Vice President and Chief Financial Officer Jim Major assuming the role of
Chief Financial Officer, Stock Building Supply Executive Vice President and Chief Operating Officer Bryan Yeazel assuming the position of Chief Administrative Officer and General
Counsel and current BMC Chief Integration Leader Tony Genito leading the integration of the two businesses. In addition to Mr. Alexander and Mr. Rea, the remainder of the
combined company’s Board of Directors will be comprised wholly of independent directors, including representatives from each company’s current board. The combined company will
be headquartered in Atlanta, GA and will have its main operating center in Raleigh, NC and plans to continue to operate under both the Stock Building Supply and BMC names in their
respective local markets.
Mr. Alexander possesses 21 years of experience in the distribution industry. He joined BMC as a director in January 2010 and subsequently was appointed Chief Executive Officer in
August 2010. He has led BMC as it has grown into one of the industry-leading providers of residential building products and construction services in fast-growing regions throughout
the U.S. Prior to BMC, Mr. Alexander served as President and Chief Executive Officer at ORCO Construction Distribution. He previously served in leadership roles at several
companies in the technology, retail/distribution and service industries, including GE Capital, ComputerLand (now Vanstar), Premiere Global Services and Coast to Coast Hardware.
Strategic Benefits
The transaction is expected to result in a combined company that is better positioned to accelerate its growth and deliver significant value to all stakeholders as it continues to accelerate
both Stock Building Supply’s and BMC’s existing strategies of capitalizing on expansion opportunities in a fragmented building materials market to strengthen its long-term growth
position.
BMC and Stock Building Supply both possess complementary product and service offerings, similar operating principles and a customer service focus that will enable a smooth and
efficient integration. The combined company will have a strong position in growth markets across 17 states. Together, the companies will also provide a comprehensive portfolio of
building materials, including millwork and structural frame manufacturing capabilities, consultative showrooms and value-added installation management that supports customers’
needs for turnkey solutions. Additionally, BMC’s businesses will provide expanded opportunity to introduce Stock Building Supply’s industry-leading eBusiness platform.
Customers of BMC and Stock Building Supply will continue to experience the same proactive, high-touch service and quality product offerings they have come to rely upon, while
receiving the benefits of an expanded product line and stronger technology platform. In addition, the
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combined company plans to continue to focus on building a high performance, teamwork-driven culture that will offer increased opportunities to its employees as the company
accelerates its growth trajectory.
Financing
In connection with the transaction, Stock Building Supply and BMC have received a joint commitment from Wells Fargo Bank, N.A. and Goldman Sachs Bank USA, contingent upon
the closing of the transaction, to consolidate and upsize existing revolving Asset Based Loan facilities to $450 million for use by the combined company. Available funds will be used
to refinance outstanding balances under the current revolving credit facilities, support up to $75 million in letters of credit, and fund transaction costs, general corporate purposes and
working capital. Additionally, $250 million of existing BMC Senior Secured Notes maturing in 2018 are expected to remain outstanding. The closing of the transaction is not subject to
financing conditions.
Advisors
Barclays Capital Inc. is serving as financial advisor to Stock Building Supply, with Hunton & Williams LLP serving as legal counsel. Goldman, Sachs & Co. is serving as financial
advisor and Kirkland & Ellis LLP is serving as legal counsel to BMC.
Conference Call
Stock Building Supply and BMC will host a conference call today, June 3, 2015 at 9:00 a.m. (Eastern Time) and will simultaneously broadcast it live over the Internet. The conference
call can be accessed by dialing 1-877-407-0784 (domestic) or 1-201-689-8560 (international). An investor presentation, to be reviewed during the conference call, can be accessed via
Stock Building Supply’s investor relations website at ir.stocksupply.com. A telephonic replay of the conference call will be available immediately after the call and can be accessed by
dialing 1-877-870-5176, or for international callers, 1-858-384-5517. The passcode for the live call and the replay is 13611438. The live webcast and archived replay can be accessed
on Stock Building Supply’s investor relations website at ir.stocksupply.com. The online archive of the webcast will be available for approximately 90 days.
About Stock Building Supply
Stock Building Supply operates in 21 metropolitan areas in 14 states primarily in the South and West regions of the United States (as defined by the U.S. Census Bureau). Today, we
serve our customers from 68 strategically located facilities. We offer a broad range of products, including lumber and lumber sheet goods, millwork, doors, flooring, windows,
structural components, engineered wood products, trusses, wall panels and other exterior products. Our customer base includes production homebuilders, custom homebuilders and
remodeling contractors.
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About BMC
BMC, headquartered in Atlanta, Georgia, is a leading provider of residential building products and construction services to professional builders and contractors in the Western United
States, Texas and North Carolina. The company has 38 lumber yards, 18 truss manufacturing facilities, 23 millwork operations and 3 Design Centers in 11 of the top 25 single-family
construction markets.
Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified
by words or phrases such as “may,” “might,” “predict,” “future,” “seek to,” “assume,” “goal,” “objective,” “continue,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” or the negative of such terms and other words, terms and phrases of similar meaning.
Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Stock Building Supply cautions readers that any
forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. Such forwardlooking statements include, but are not limited to, statements about the benefits of the proposed merger involving BMC and Stock Building Supply, including future financial and
operating results, Stock Building Supply’s or BMC’s plans, objectives, expectations and intentions, the expected timing of completion of the transaction, and other statements that are
not historical facts. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this
communication. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties relating to:
the ability to obtain the requisite BMC and Stock Building Supply shareholder approvals; the risk that Stock Building Supply or BMC may be unable to obtain governmental and
regulatory approvals required for the merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the
parties to abandon the merger; the risk that a condition to closing of the merger may not be satisfied; the timing to consummate the proposed merger; the risk that the businesses will
not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected;
disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-related issues;
general worldwide economic conditions and related uncertainties; the effect of changes in governmental regulations; and other factors discussed or referred to in the “Risk Factors”
section of Stock Building Supply’s most recent Annual Report on Form 10-K filed with the Securities and
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Exchange Commission (“SEC”) on March 2, 2015, and our subsequent filings with the SEC. These risk factors, as well as other risks associated with the merger, will be more fully
discussed in the Registration Statement and the Proxy /Consent Solicitation Statement/Prospectus (as defined below). All such factors are difficult to predict and are beyond Stock
Building Supply and BMC’s control. All forward-looking statements attributable to Stock Building Supply or persons acting on Stock Building Supply’s behalf are expressly qualified
in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and Stock Building Supply and BMC undertake no obligation to update or
revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
No Offer or Solicitation
The information in this communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or
the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
The proposed transaction involving Stock Building Supply and BMC will be submitted to the respective stockholders of Stock Building Supply and BMC for their consideration. In
connection with the merger and special meeting of Stock Building Supply’s stockholders, Stock Building Supply expects to file with the SEC a registration statement on Form S-4 (the
“Registration Statement”) that will include a proxy statement/consent solicitation/prospectus (the “Proxy/Consent Solicitation Statement/Prospectus”). The definitive Registration
Statement and the Proxy/Consent Solicitation Statement/Prospectus will contain important information about the merger, the merger agreement and related matters. This
communication may be deemed to be solicitation material in respect of the proposed transaction between BMC and Stock Building Supply. This communication is not a substitute for
the Registration Statement, Proxy/Consent Solicitation/Prospectus or any other documents that Stock Building Supply or BMC may file with the SEC or send to shareholders in
connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF STOCK BUILDING SUPPLY AND BMC ARE URGED AND ADVISED TO READ THE
REGISTRATION STATEMENT AND THE PROXY/CONSENT SOLICITATION STATEMENT/PROSPECTUS CAREFULLY WHEN THEY BECOME AVAILABLE, AS
WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC AND ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. The Registration Statement, the Proxy /Consent Solicitation Statement/Prospectus and any other documents filed or furnished by
Stock Building Supply with the SEC may be obtained free of charge at the SEC’s website (www.sec.gov). The
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Registration Statement, the Proxy/Consent Solicitation Statement/Prospectus and other relevant documents will also be available to security holders, without charge, from Stock
Building Supply by going to its investor relations page on its corporate website at http://ir.stocksupply.com or from BMC by directing a request to Paul Street, Corporate Secretary of
BMC, via email or telephone ( [email protected] , (208) 331-4300.
Participants in the Merger Solicitation
Stock Building Supply, BMC, their respective directors and certain of their executive officers and employees may be deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Information about the directors and executive officers of Stock Building Supply is set forth in the proxy statement for Stock Building
Supply’s 2015 Annual Meeting of Stockholders, which was filed with the SEC on April 30, 2015. Information about the directors and executive officers of BMC and more detailed
information regarding the identity of all potential participants, and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement
and the Proxy/Consent Solicitation Statement/Prospectus. Investors may obtain additional information regarding the interests of such participants by reading the Registration Statement
and the Proxy/Consent Solicitation Statement/Prospectus when they become available. You may obtain a free copy of the proxy statement for Stock Building Supply’s 2015 Annual
Meeting of Stockholders by going to its investor relations page on its corporate website at http://ir.stocksupply.com. You may obtain free copies of the Registration Statement, the
Proxy/Consent Solicitation Statement/Prospectus and other relevant documents as described in the preceding paragraph.
Contacts
Stock Building Supply:
Investor Relations
Mark Necaise, Stock Building Supply
(919) 431-1021
Media Relations
Tom Johnson / Dana Gorman / Kate Schneiderman, The Abernathy MacGregor Group
(212) 371-5999
BMC:
Investor Relations
Paul Street, BMC
(208) 331-4381
Media Relations
Michael Freitag / Sharon Stern / Leigh Parrish
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
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Exhibit 99.2
Merger of Building Materials Holding Corporation and Stock
Building Supply
A Compelling Strategic Combination
June 3, 2015
Disclaimer
Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically
identified by words or phrases such as “may,” “might,” “predict,” “future,” “seek to,” “assume,” “goal,” “objective,” “continue,” “will,” “could,” “should,” “would,” “anticipate,”
“estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” or the negative of such terms and other words, terms and phrases
of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Stock Building Supply
Holdings, Inc. (“STOCK” or “STOCK BUILDING SUPPLY”) cautions readers that any forward-looking statement is not a guarantee of future performance and that actual
results could differ materially from those contained in the forward-looking statement. Such forward-looking statements include, but are not limited to, statements about
the benefits of the proposed merger involving Building Materials Holding Corporation (“BMC”) and Stock Building Supply, including future financial and operating results,
Stock Building Supply’s or BMC’s plans, objectives, expectations and intentions, the expected timing of completion of the transaction, and other statements that are not
historical facts. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this
communication. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and
uncertainties relating to: the ability to obtain the requisite BMC and Stock Building Supply shareholder approvals; the risk that Stock Building Supply or BMC may be
unable to obtain governmental and regulatory approvals required for the merger, or required governmental and regulatory approvals may delay the merger or result in the
imposition of conditions that could cause the parties to abandon the merger; the risk that a condition to closing of the merger may not be satisfied; the timing to
consummate the proposed merger; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the
transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with
customers, employees or suppliers; the diversion of management time on merger-related issues; general worldwide economic conditions and related uncertainties; the
effect of changes in governmental regulations; and other factors discussed or referred to in the “Risk Factors” section of Stock Building Supply’s most recent Annual
Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 2, 2015, and our subsequent filings with the SEC. These risk factors, as well
as other risks associated with the merger, will be more fully discussed in the Registration Statement and the Proxy /Consent Solicitation Statement/Prospectus (as
defined below). All such factors are difficult to predict and are beyond Stock Building Supply and BMC’s control. All forward-looking statements attributable to Stock
Building Supply or persons acting on Stock Building Supply’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements
speak only as of the date made, and Stock Building Supply and BMC undertake no obligation to update or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.
Non-GAAP Financial Measures
Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally
accepted accounting principles in the United States of America. Our management believes such measures are useful to investors. Because the Company’s calculations
of these measures may differ from similar measures used by other companies, you should be careful when comparing the Company’s non-GAAP financial measures to
those of other companies. A reconciliation of non-GAAP financial measures to GAAP financial measures is included in an appendix to this presentation.
1
Proven Leadership
Joined Stock in 2010 as President and CEO
Joined BMC in January 2010 as director and
appointed CEO in August 2010
Served as President of TE Connectivity’s Specialty
Group and as SVP of the Building Products Group
at Berkshire Hathaway’s Johns Manville
Jeff Rea
Presidentand
CEO
21 years of experience in the distribution industry
15 years of experience in various leadership roles
at General Electric
Peter Alexander
CEO
Joined BMC in April 2013
35 years of experience in senior finance positions
Joined Stock in 1998 as assistant controller
22 years of experience various in finance positions
Jim Major
Executive Vice
President, CFO
Previously served as audit manager at
PricewaterhouseCoopers
Michael Kestner
CFO
13 years as CFO at Hilite International, Inc., 4 years
as CFO of Sinter Metals, Inc., and public company
director
Joined BMC in 2015
Joined Stock in 2005 as General Counsel
Bryan Yeazel
Executive Vice
President, COO
Served as SVP for ComputerLand International,
SVP for GE Capital, President of AmeriData Global
and CEO of ORCO Construction Supply
34 years of experience in senior financial and M&Arelated positions
Previously served as Executive Vice President,
Chief Administrative Officer, General Counsel &
Corporate Secretary at Stock
TonyGenito
Chief
Integration
Leader
Previously served as global capital markets and
M&A lawyer at Hunton & Williams
___________________________
Note: Check marks denote today’s presenters.
2
10 years as CFO at Spectrum Brands Holdings
Corp, and 12 years with Schering-Plough
Corporation in various positions
Previously served as senior audit manager at
Deloitte & Touche
A Compelling Strategic Combination
1
Creates a leading national building materials distribution platform with over $2.7 billion (1) of combined LTM net sales
through March 31, 2015
A Market Leader with
National Scale
2
Broad geographic reach, local market leadership and comprehensive product and services portfolio
Significant market expansion in attractive geographies: Stock footprint increases from 21 to 42 metropolitan areas on a
combined basis
Enhanced Geographic
Diversity and Capabilities
Both organizations focus on value-added products and services; combined capabilities increase significantly as best
practices expanded to 2x revenue
3
Market leadership in highly attractive long-term growth markets throughout the U.S.
4
5
Leadership in Attractive
Growth Markets Poised for
Continued Recovery
New construction and R&R markets poised for continued recovery
Deep commitment to providing solutions to customers; highly focused on delivering a broad range of quality products and
value-added services
Compatible Cultures,
Strategies and Operating
Principles
Strong operating platforms and complimentary strategic roadmaps create significant integration opportunities
Highly attractive combined organic growth and return profile
Significant synergies anticipated - $30 to $40 million annually
Attractive Value Creation for
All Shareholders
Opportunities to accelerate growth on combined platform through broader service and product capabilities
Transaction expected to be EPS accretive in the first full year following closing
Strong balance sheet and financial flexibility support continued pursuit of attractive growth opportunities
All-stock transaction allows all shareholders to participate in value creation from transaction
___________________________
1.
Includes $134 million in LTM net sales from VNS Corporation, which was acquired by BMC in May 2015.
3
Transaction Overview
Structure
•
Stock-for-stock, tax-free exchange
Ownership
•
Stock shareholders: 40% / BMC shareholders: 60%
Implied
Consideration
•
•
•
•
BMC shareholders receive 0.5231 Stock Building Supply share for each BMC share
Implied pro forma Enterprise Value of $1,538 million as of June 2, 2015
Pro forma debt of $363 million(1), including $250 million notes due 2018
Committed financing at close through upsized $450 million revolving ABL facility
•
Post-Close
Governance and
Management
Timing and
Closing
Conditions
Combined company will retain top talent from both companies
• Jeff Rea – Will remain Board member
• Peter Alexander – CEO
• Jim Major – CFO
• Bryan Yeazel – CAO & General Counsel
• Tony Genito – Chief Integration Leader
• Board of Directors: Peter Alexander, Jeff Rea, plus independent directors from each Company’s
current Board
•
•
•
•
Shareholder vote by both Stock Building Supply and BMC shareholders
Transaction supported by BMC management and over 50% of existing BMC shareholders
Conditional on customary regulatory and shareholder approvals
Expected to close in Q4 of 2015
___________________________
1.
Pro forma debt as of 3/31/15, excludes transaction costs and includes $5 million of BMC Revolver borrowings used to fund the acquisition of VNS Corporation in May 2015.
4
A Combination of two Market Leading Platforms
Stock Building Supply
BMC
• 48 Distribution Yards
• 15 Truss Manufacturing Facilities
• 20 Millwork Operations
• 38 Distribution Yards
Operations
• Various Design Centers and Showrooms
• 18 Truss Manufacturing Facilities
• 23 Millwork Operations
• Various Design Centers and Showrooms
• Distribution Services, Installation Management,
Structures and Millwork Manufacturing,
Showrooms and Design Centers, Project
Planning, eBusiness
Key Service
Capabilities
$1,313 million
LTM 3/31/15 Net Sales
$1,449 million(1)
~3,200
Employees
~5,300
___________________________
1.
Includes $134 million in LTM net sales from VNS Corporation.
5
• Distribution Services, Construction Services,
Structures and Millwork Manufacturing
Showrooms and Design Centers, Project
Planning
Highly Attractive Financial Profile
Combined company will have a strong balance sheet with significant growth opportunities
Pro Forma LTM 3/31/15 Revenue
(1)
Pro Forma LTM 3/31/15 Adjusted EBITDA
($ in millions)
($ in millions)
$2,762
(2)
$161
Expected
Run-Rate
Synergies
$30 - $40mm
$1,449
$85
$1,313
$41
5.8%
___________________________
1.
BMC results include $134 million in LTM net sales and $6 million in LTM adjusted EBITDA from VNS Corporation.
2.
Pro forma combined Adjusted EBITDA assumes the midpoint of the expected run-rate synergies range.
6
5.9%
3.1%
(1)
Building Materials Holding Corporation
Overview:
A Leader in Highly Attractive Markets
Overview of BMC
BMC is a market leader in highly attractive regions throughout the U.S. and is predominately
focused in the West
Overview
Historical Financial Performance
($ in millions)
Has provided local expertise to professional
builders focused on residential and light
commercial construction for 28 years
2012 –2014 CAGR: 21.6%
$1,210
$1,311
2013
2014
$887
Strong presence in attractive markets in the West,
Texas and Southeast
2012
2012 –2014 CAGR: 91.3%
Presence in 27 metropolitan areas, primarily in
the south and west
$77
$65
$21
Year-round construction cycle in most markets
2012
Dedicated workforce of approximately 5,300
employees
2013
2014
Single Family Building Permits
BMC Markets
Rest of U.S.
Operationally well-positioned to continue to
benefit from the housing market recovery
125
7
97
96
2010
2011
2012
149
2013
159
2014
350
322
2010
2011
394
2012
472
476
2013
2014
Overview of BMC's Product and Service Offering
Over the past several years BMC has optimized its operational mix with a greater focus on valueadded business lines
Product Overview & Service Offering
Lumber & Building Materials (LBM)
BMC 2014 Sales Mix
Truss
Lumber & Building
Materials (LBM)
43%
Truss
6%
Millwork
Construction Services
Construction
Services
22%
8
Millwork
29%
BMC’s Value-Added Service Capabilities
BMC distinguishes itself in the market by delivering value-added service capabilities, which in
combination with its broad product offering, delivers comprehensive solutions for customers
Differentiated, Value-Added Service Offering
Account
Management
Product
Services
Construction
Services
Project
Expertise
Design
Centers
Ready-Frame
DESIGN
CENTERS
Job site visits
throughout project
keep customers on
budget and on
schedule
Quotes and
estimates
Blueprint and plan
take-off services
Production of
unique custom
doors, molding and
other millwork
using state-of-theart CAD design
and manufacturing
Delivery and
installation prehung doors and
windows, stairs,
cabinets, and
interior and
exterior trim
Specialize in light
commercial and
multi-family
construction
projects
Motels
Multi-family
Residential
Manufacture of
custom millwork to
specifications, with
CAD design
service
Restaurants
Retail
Strip Malls
Distribute and
install custom
windows, built to
order
___________________________
Note: Check marks represent services also provided by Stock.
9
Design
specialists help
guide customers
through product
selection with
trained eyes,
construction knowhow, and a
commitment to
excellent
craftsmanship
Used by builders to
construct wall
panels, roof
trusses, floor
trusses, floors and
framing solutions
Utilizes proprietary
commercial
software &
equipment creating
a unique brand
with a targeted
sales and
marketing process
An Expanded Platform for Growth
Significant Benefits for Shareholders
Evolution of Stock Building Supply
A transformational repositioning, strong execution, and strategic growth initiatives have delivered
attractive returns for stakeholders
Repositioned Around the Core
Jeff Rea joins as CEO
Acquired Bison Building Materials
Company strategically restructured
footprint focusing on most attractive
geographies
Strategic
Evolution
2010
2011
Poised for future Profitable
Growth
Successfully executed IPO
Added capacity / capabilities
Integrated TBSG and
Chesapeake acquisitions
2011
2013
Built an Operating Platform
Introduced e-Business logistics
service platform
Launched LEAN business culture
Improved integrated supply chain
Implemented Field leadership
structure
Financial
Evolution
Adj. EBITDA
$752
$760
2015
Accelerated Execution on Strategic
Priorities
Expansion of structural component
facilities
Added distribution and customer
support capacity to drive growth
Additional eBusiness investments
$1,197
($ in millions)
Net sales
2014
Combination expected to
close Q4; accelerates
differentiated building
materials distribution
platform
$1,296
$2,762
$1,313
$942
$161
($58)
($31)
$2
$28
$37
$41
2010
2011
2012
2013
2014
3/31/15 LTM
Combination is a Compelling Next Step
___________________________
Note: Red dotted items represent pro forma financials including BMC, VNS Corporation and the midpoint of the expected run-rate synergies range.
10
Combination is a Compelling Next Step
Creates a leading building materials distribution company with enhanced scale, national and local
capabilities
Strategic
Rationale
Complementary footprint: provides a strong presence in some of the nation’s fastest growing regions
Expands overall customer and supplier solutions capabilities with a synergistic suite of products
and value added services
Strategies are complementary: value - added products, innovative customer solutions, strong
operating platform, strategic expansion capacity
Significant
Value
Creation
Enhances growth, margin and return profile
Earnings accretive in the first full year following closing: combination enables significant synergies
Proven execution capability: combined company has proven management with a strong track record
Enhanced customer service with stronger field - oriented and service capabilities
Enhanced
Growth
Enablers
Transaction structure: all stock merger presents opportunity for Stock shareholders to participate in
the value creation
Maintains strong balance sheet and enhances credit quality
Provides growth accelerators: combined company well positioned to pursue strategic growth
initiatives, including M&A
Provides customer and talent benefits: customers benefit from combined service improvements;
employees have greater access to training, tools, and career opportunities
11
An Expanded Platform for Growth
Strategic Benefits of the Transaction
Combination Creates a Market Leader with National Scale
A market leading building products distributor well positioned to grow profitably through the U.S.
housing recovery and beyond
LBM 2014A Distributor Sales (1)
Historical U.S. Housing Starts
($ in billions)
$6.1
(In thousands)
(2)
Single -Family
Multifamily
Creates the #2 LBM Distributor
Significant growth capabilities and
capacity
Still meaningful expansion
opportunities
2014 Starts
1,003
Peak (2005)
2,068
2014 % Growth to Peak
106.1%
2014 % Growth to Average
1,569
44.5%
2,068
1,956
1,848
1,801
1,705
1,602
1,355
Long Term Average: 1,449
$2.7
(3)
$2.3
925
906
1,003
780
$1.4
(3)
$1.4
609
554 587
$1.3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
___________________________
Source: U.S. Census Bureau.
1.
BMC Financials include VNS Corporation.
2.
Builders FirstSource 8-K (April 13,2015).
3.
ProSales Magazine sales ranking for 2014 revenue.
4.
Average housing starts from 1959 to 2014.
12
Highly Complementary Footprint
Highly complementary branch networks, serving fast-growing regions …
Sales by U.S. Census Division (1)
WA
Pacific
18%
MT
Mid & South
Atlantic
25%
ID
PA
NV
UT
Mountain
20%
CO
West South
Central
37%
MD
VA
CA
AR
NM
Commentary
NC
TX
SC
GA
FL
Presence increases from 21 to 42
metropolitan areas
Locations in 17 states representing 63% of
2014 single-family building permits
BMC Locations
Strong capabilities with significant
expansion opportunities
Stock Building Supply Locations
Network of:
Combined Company Footprint
___________________________
1.
2014 combined net sales including VNS Corporation.
13
—
86 Distribution Locations
—
33 Truss and Structures Operations
—
43 Millwork Operations
—
Complementary Design Centers and
Showrooms
Enhanced Capabilities - Focused on Value-Added Products
and Services
A comprehensive suite of value-added products and services to provide clients with holistic
solutions
Distribution Services
Truss Manufacturing
Millwork
Manufacturing
38 Distribution Yards
18 Truss Manufacturing
Facilities
23 Millwork Operations
Distribution Services
Truss Manufacturing
Millwork
Manufacturing
Construction
Services
Turnkey Solutions
Installation
Management
Design Centers
Expanding Design
Capabilities
LEAN eBusiness
Stock Logistics
Solutions
eCFO
Stock Installation
Services
48 Distribution Yards
15 Truss Manufacturing
Facilities
20 Millwork Operations
14
Turnkey Solutions
o Stock Design Services
o Stock eCommerce
Complementary Strategies
Leading talent, resources and complementary strategies to accelerate growth
Value-added Products
Differentiated Services
Low Cost / High Service Operating
Platform:
o eBusiness capabilities
o Customer solutions
o Talent productivity / enablers
Strong Balance Sheet Enables
Strategic and Accretive Expansion
Combined … BMC and Stock have enhanced capabilities that provide Value-Added
Products, Services and Solutions for our Customers
15
Attractive Value Creation for All Shareholders
EPS Accretion
Expected to deliver attractive earnings accretion in the first full year
following close
Projected synergies of $30 - $40m annually within 24 months
Significant
Synergies
Enhanced Overall
Financial Profile
Combination and resulting synergies projected to deliver pro forma
EBITDA margins ~2x current margin profile with continued room for
expansion
Increased scale, enhanced network density, exposure to high growth
markets, expanded product and service offering positions combined
company to continue to deliver above-market growth
Strong balance sheet and resulting financial flexibility positions the
combined company for continued growth investments, including M&A
Proposed transaction significantly enhances growth and return profile
16
Significant Opportunity for Synergies
Estimated Run-Rate Cost Synergies
Commentary
($ in millions)
Integration strategy developed with clear objectives and welldefined integration leadership team
$30-$40
Highly identifiable and achievable cost savings
$20-$25
Run-rate synergies of $20-$25 million within 12 months of
close, rising to $30-$40 million within 24 months
Total synergies represent up to 1.5% of combined sales
12 Months
24 Months
Synergies will be achieved from:
Sourcing / supply chain
Estimated Synergies by Category
Operations best practices
SG&A &
Other Costs
~36%
Optimization of branch support processes
Deployment of best-in-class technology across enterprise
Sourcing /
Supply Chain
~64%
Estimated costs to achieve synergies of $20-$25 million(1)
Opportunities to accelerate growth on combined platform
through broader services and product capabilities
___________________________
1.
Excludes transaction costs.
17
Strong Balance Sheet And Financial Flexibility
Combined company has financial flexibility to execute on strategic initiatives and pursue additional
M&A opportunities
3/31/15 Pro Forma Capitalization(1)
Commentary
($ in millions)
Retain financial flexibility for growth
Pro forma 3/31/2015 debt of $363 million
Cash
$16
$8
$24
Debt
$275
$88
$363
Net Debt /
LTM Adj.
EBITDA
3.1x
2.0x
2.7x
$450 million revolving ABL facility with
extended maturity; less than $100 million
drawn at 3/31/15
Existing $250 million BMC 9.0% Senior
Secured Notes maturing 2018
Well positioned for continued growth
investments, including M&A
___________________________
1.
BMC adjusted to reflect cash and revolver borrowings used to fund the purchase of VNS Corporation in May 2015.
18
BMC and Stock: A Compelling Strategic Combination
Attractive Value Creation for All Shareholders & Customers
Creates a market leading national building products distribution platform with ability to
accelerate strategic transformation
Opportunities to accelerate profitable growth on combined platform through broader
customer services and product / solutions capabilities
Significant synergies anticipated - $30 to $40 million annually
Transaction expected to be EPS accretive in the first full year following closing
Strong balance sheet and financial flexibility support continued pursuit of attractive growth
opportunities
All-stock transaction allows all shareholders to participate in value creation from transaction
19
Q&A
Appendix
BMC Adjusted EBITDA Schedule
($ in thousands)
Net (loss) income
Year Ended December 31,
2013
2012
LTM March 15
2014
BMC
VNS
(1)
Total
($17,533)
$21,655
$94,032
$92,145
$2,749
$94,894
Depreciation and amortization
13,248
13,767
15,457
16,466
1,228
17,694
Interest expense
14,159
18,786
27,090
27,221
258
27,479
(65,577)
(68,273)
$71,002
$67,559
Income tax (benefit) expense
EBITDA
Headquarters relocation
(6)
6,273
$9,868
$60,481
1,424
$5,659
(66,849)
$73,218
-
-
2,054
3,431
-
3,431
Share-based compensation
2,054
2,425
3,410
3,246
-
3,246
Insurance deductible reserve adjustments
7,462
1,772
669
897
-
897
Restructuring costs
1,729
73
134
134
-
134
-
2,826
Loss portfolio transfer
-
-
-
2,826
Acquisition related costs
-
-
-
533
238
771
Discontinued operations and other
-
-
-
-
560
560
$6,457
$85,083
Adjusted EBITDA
$21,113
$64,751
___________________________
1.
Represents unaudited pro forma historical results including VNS Corporation, which was acquired by BMC in May 2015.
20
$77,269
$78,626
Stock Adjusted EBITDA Schedule
Year Ended December 31,
($ in thousands)
2010
2011
2012
Income (loss) from continuing operations
$(65,780)
$(41,931)
$(14,582)
$(5,036)
$10,087
$15,247
1,575
2,842
4,037
3,793
2,684
2,764
(47,463)
(22,332)
(8,084)
2,874
6,340
4,247
36,149
16,188
11,718
12,060
13,343
14,023
2,944
580
361
432
48
-
-
-
-
10,008
508
60
7,089
1,349
2,853
141
73
258
288
384
1,305
1,049
2,669
2,854
12,642
6,761
2,375
1,113
779
663
3,056
1,937
347
-
-
-
(8,487)
3,423
1,663
1,369
358
597
$(57,987)
$(30,799)
$1,993
$27,803
$36,889
$40,713
Interest expense
Income tax expense (benefit)
Depreciation and amortization
Impairment of assets held for sale
Public offering transaction-related costs
Restructuring expense
Non-cash stock compensation expense
Severance and other items related to store closures and business
optimization
Reduction of tax indemnification asset
Management fees, acquisition costs & other items
Adjusted EBITDA
___________________________
1.
LTM Results Unaudited.
21
2013
2014
LTM Mar 15 (1)
Disclaimer and Additional Information
No Offer or Solicitation
The information in this communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or
buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall
there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
The proposed transaction involving Stock Building Supply and BMC will be submitted to the respective stockholders of Stock Building Supply and BMC for their
consideration. In connection with the merger and special meeting of Stock Building Supply’s stockholders, Stock Building Supply expects to file with the SEC a
registration statement on Form S-4 (the “Registration Statement”) that will include a proxy statement/consent solicitation/prospectus (the “Proxy/Consent
Solicitation Statement/Prospectus”). The definitive Registration Statement and the Proxy/Consent Solicitation Statement/Prospectus will contain important
information about the merger, the merger agreement and related matters. This communication may be deemed to be solicitation material in respect of the
proposed transaction between BMC and Stock Building Supply. This communication is not a substitute for the Registration Statement, Proxy/Consent
Solicitation/Prospectus or any other documents that Stock Building Supply or BMC may file with the SEC or send to shareholders in connection with the proposed
transaction. INVESTORS AND SECURITY HOLDERS OF STOCK BUILDING SUPPLY AND BMC ARE URGED AND ADVISED TO READ THE REGISTRATION
STATEMENT AND THE PROXY/CONSENT SOLICITATION STATEMENT/PROSPECTUS CAREFULLY WHEN THEY BECOME AVAILABLE, AS WELL AS
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC AND ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. The Registration Statement, the Proxy /Consent Solicitation Statement/Prospectus and any other documents filed
or furnished by Stock Building Supply with the SEC may be obtained free of charge at the SEC’s website (www.sec.gov). The Registration Statement, the
Proxy/Consent Solicitation Statement/Prospectus and other relevant documents will also be available to security holders, without charge, from Stock Building
Supply by going to its investor relations page on its corporate website at http://ir.stocksupply.com or from BMC by directing a request to Paul Street, Corporate
Secretary of BMC, via email or telephone ( [email protected] , (208) 331-4300.
Participants in the Merger Solicitation
Stock Building Supply, BMC, their respective directors and certain of their executive officers and employees may be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction. Information about the directors and executive officers of Stock Building Supply is set forth in the proxy
statement for Stock Building Supply’s 2015 Annual Meeting of Stockholders, which was filed with the SEC on April 30, 2015. Information about the directors and
executive officers of BMC and more detailed information regarding the identity of all potential participants, and their direct and indirect interests, by security
holdings or otherwise, will be set forth in the Registration Statement and the Proxy/Consent Solicitation Statement/Prospectus. Investors may obtain additional
information regarding the interests of such participants by reading the Registration Statement and the Proxy/Consent Solicitation Statement/Prospectus when they
become available. You may obtain a free copy of the proxy statement for Stock Building Supply’s 2015 Annual Meeting of Stockholders by going to its investor
relations page on its corporate website at http://ir.stocksupply.com. You may obtain free copies of the Registration Statement, the Proxy/Consent Solicitation
Statement/Prospectus and other relevant documents as described in the preceding paragraph.
22