IPO Report: Stock Building Supply (STCK)

Francis Gaskins  |

Nine other IPOs were scheduled for the week of August 5. The full IPO calendar can be found at IPOpremium.

Stock Building Supply ($STCK) is based in Raleight, NC.  STCK scheduled an $150 million IPO with a market capitalization of $435 million at a price range mid-point of $17, for Friday, August 9, 2013.

The STCK S-1 was filed July 30, 2013.  The manager and joint managers are Goldman; Barclays; Citigroup.  The co-managers are Baird; Stephens; Wells Fargo.


STCK is a large, diversified lumber and building materials ("LBM") distributor and solutions provider that sells to new construction and repair and remodel contractors.

STCK lost money in 2011, was breakeven in 2012, had a reduced loss in Q1 '13 vs Q1 '12. The bloom is off the housing market segment excitement.

50% of the IPO proceeds are going to selling shareholders.


Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q1 '13

Cap (mm)





in IPO

Stock Building Supply (STCK)







Ply Gem (PGEM)







Boise Cascade (BCC)







PGEM IPO'd May 23 at $21 and is down 12%, BCC IPO'd February 2, 2013 and is up 26%, but BCC is profitable.





Market Do-



1-5, 5 is high






20 is perfect






C, 7



STCK isn't making money and IPO'ing at .4 times annualized sales. It's likely that segment buyers (PGEM, BCC, etc) will want a piece of STCK, but the current market doesn't particularly like companies that are losing money (except some biopharma and some cloud companies). The rating is avoid in the current market at the price range mid-point.


STCK is a large, diversified lumber and building materials ("LBM") distributor and solutions provider that sells to new construction and repair and remodel contractors.

Primary products are lumber & lumber sheet goods and structural components, including engineered wood, trusses and wall panels, millwork, doors, flooring, windows & other exterior products. Additionally, STCK provides solution-based services to customers, including design, product specification and installation management services.

STCK serves a broad customer base, including large-scale production homebuilders, custom homebuilders and repair and remodeling contractors, and believes it is among the top three LBM suppliers for residential construction in 80% of the geographic markets in which STCK operates, based on net sales.

STCK offers over 39,000 products sourced through its strategic network of suppliers, which together with various solution-based services represent 50% of the construction cost of a typical new home.

STCK has operations in 13 states that accounted for 48% of 2012 U.S. single-family housing permits according to the U.S. Census Bureau. STCK operates in 20 metropolitan areas in these 13 states that STCK believes has an attractive potential for economic growth based on population trends, increasing business activity and above-average employment growth.


The building products supply and services industry is highly dependent on new home construction and repair and remodeling activity, which in turn are dependent upon a number of factors, including interest rates, consumer confidence, employment rates, foreclosure rates, housing inventory levels, housing demand, the availability of land, the availability of construction financing and the health of the economy and mortgage markets.

As of June 2013, McGraw-Hill Construction forecasts that U.S. single-family housing starts will increase to 1.1 million by 2015. However, there is significant uncertainty regarding the timing and extent of any recovery in construction and repair and remodel activity and resulting product demand levels.


STCK competes in the professional building contractor segment of the U.S. residential new construction building products supply market (the "Pro Segment").

STCL focuses on a distinctly different target market than home center retailers such as The Home Depot and Lowe's, which currently primarily serve do-it-yourself and remodeling customers.

The largest competitors in STCK's markets include 84 Lumber Co., Builders FirstSource, Inc., Building Materials Holding Corporation and Pro-Build Holdings, Inc.


At March 31, 2013, STCK had 2,557 full-time equivalent employees, none of whom were represented by a union.

5% stockholder pre-IPO

Gores Building Holdings, LLC (private equity)
About the Gores Group

Use of proceeds

Common stock offered by us 4,411,765 shares
Common stock offered by the selling stockholders 4,411,765 shares

STCK expects to receive $67.5 million from its IPO. Proceeds are allocated to repay debt.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
STCK BMC Stock Holdings Inc n/a n/a n/a 0
GNBA Groen Bros Aviation Inc n/a n/a n/a 0


Emerging Growth

Radient Technologies Inc.

Radient Technologies Inc is engaged in research, development and commercialization of environmentally responsible technology for the extraction, isolation and purification of soluble products from a wide range of materials using…