building products industry update: wood &...

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Building Products: Decking

Building Products

Industry Update: Wood & Decking Fall 2016

©2016 League Park Advisors

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Wood & Decking Sector Outlook

Domestic demand for competitive decking is projected to

exceed 3.6 billion linear feet by 2020P, representing a

Compound Annual Growth Rate (“CAGR”) of 1.8% from the

3.3 billion linear feet sold throughout 2015. Though

traditional wood-based decking possesses 84% of total

decking market share, projected growth in the sector is

largely fueled by surging sales of alternatives to traditional

wood decks. Alternative decking includes wood-

composite and plastic finishes, which provide consumers

maintenance-light substitutes to traditional wood decking.

In addition to residential application, non-traditional deck

offerings have grown in popularity when installed in non-

residential tender. Despite growth in non-traditional

materials, wood deck sales are projected to reach 3.0

billion linear feet by 2020P. Projected growth in the sector

stems from positive domestic trends in new housing

completion, and relatedly, the increased marketability of

homes with pre-installed decks. Overall demand for

residential application is expected to propagate annually

at 2.3% throughout the forecast period, following positive

trends in consumer sentiment, which will support home

improvement and renovation projects.

U.S. demand for wood and other decking products, in

dollar terms, is projected to exceed $7.1 billion by 2020P.

To attain such growth, annual market expansion of 4.6%

over the $5.6 billion of 2015 recorded sales will be

necessary. Historically, demand for decking has shared

correlation to construction expenditure, and more

specifically, residential building construction. Tangentially,

residential improvement and repair activity insulates the

decking segment from baring the full effects of cyclicality

throughout the residential construction market. The

industry has maintained its resiliency through the steepest

of economic downturns over the past decade. New

decking construction projects are inherently seasonal, as

weather generally dictates consumers’ ability to purchase

and install outdoor decks. Predictably, U.S. demand peaks

between the months of April and September.

On average, traditional wood decking is the most cost

effective construction material, averaging $1.38 per linear

foot throughout 2015. Alternatives to traditional wood

decking are noticeably more expensive, as wood-plastic

composite and plastic decking cost nearly 2.5x to 3.1x as

much as their wooden counterparts, respectively. Once

installed, however, composite and plastic varieties tend to

carry vastly lower maintenance costs. The average

conservation cost of most traditional wooden decking

material nears $450 dollars annually, and requires

approximately 4.0x the upkeep of synthetic materials.

U.S. Deck Pricing

($ per linear ft.)

2005 2010 2015 2020P

Decking Average Price $1.61 $1.44 $1.73 $1.99

Selected Materials:

Wood $1.49 $1.20 $1.38 $1.52

Pressure-Treated 0.99 0.77 0.87 0.95

Redwood 1.96 1.60 1.88 2.06

Cedar 3.45 2.69 3.15 3.48

Tropical & Other 3.99 3.29 3.72 4.04

Wood-Plastic Composite 2.12 2.95 3.43 3.93

Plastic & Other Materials 3.05 3.89 4.33 4.92

Source: Freedonia

While the market for decking products is fairly fragmented,

the leading suppliers of decking include Koch Industries

(Georgia-Pacific), Trex Company, and the Weyerhaeuser

Company. Trex, the largest composite decking provider by

sales, accounted for $400 million of the $1.4 billion of

wood-plastic composite decking sold throughout 2015.

U.S. Wood & Competitive Decking Demand by Material

For the Years Ended and Ending December 31, 2005 – 2020P

(linear ft. in millions)

0

800

1,600

2,400

3,200

4,000Wood Wood / Plastic Composite

Plastic & Other Total

Source: Freedonia

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Summary Statistics

Average Pricing:

Wood – $1.38 / linear ft.

Wood-Plastic Composite – $3.43 / linear ft.

Plastic & Other Materials – $4.33 / linear ft.

Annual Maintenance Cost:

Wood – $375

Wood-Plastic Composite – $150

Plastic & Other Materials – $100

Residential Building Demand:

2015 Market Size – 1,930 million linear ft.

2015/2010 CAGR – 1.7%

2020P/2015 CAGR – 2.3%

Non-Residential Building Demand:

2015 Market Size –278 million linear ft.

2015/2010 CAGR – 2.2%

2020P/2015 CAGR – 1.5%

Non-Building Construction Demand:

2015 Market Size – 1,042 million linear ft.

2015/2010 CAGR – 0.3%

2020P/2015 CAGR – 0.9%

Total Demand:

2015 Market Size – $5.6 billion

2015/2010 CAGR – 1.0%

2020P/2015 CAGR – 5.0%

Average Lifecycle Cost by Product Type

For the Year Ended December 31, 2015

(units in $)

$11,000

$12,000

$13,000

$14,000

$15,000

$16,000

Pine Redwood Cedar Tropical Wood /

Plastic

Composite

Plastic

Source: Freedonia

Demand by Product Type

For the Year Ended December 31, 2015

Wood

84%

Wood / Plastic

Composite

13%

Plastic &

Other

3%

2015

Source: Freedonia

Wood & Competitive Decking Demand by Application

For the Years Ended and Ending December 31, 2005 – 2020P

(linear ft. in millions)

0

800

1,600

2,400

3,200

4,000 Residential Buildings Non-Residential Buildings

Non-Building Construction Total

Source: Freedonia

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Public Company Comparison

Publicly-traded building products companies have

generally outperformed the broader equity market (i.e.,

S&P 500 Index) trends over the past five years, and have

been steadily expanding through the first eight months of

2016. As of September 6, 2016, the median publically

tracked decking company was trading at 97.0% of its 52

week high. Public company valuations multiples remain

strong in the recovery period following the steep decline

preceding 2010. The average Earnings Before Interest, Tax,

Depreciation, and Amortization (“EBITDA”) multiple for

building products companies was 12.5x as of September 6,

2016. Publicly-traded building products tracked grew their

revenue base throughout the last twelve months at an

average rate of 4.7%.

Relative Stock Price Performance

As of September 6, 2016

Price as of 52 Week

09/06/16 High Low % of High

Lumber & Building Material Suppliers

Beacon Roofing Supply, Inc. $46.32 $48.96 $32.02 94.6%

Bluelinx Holdings Inc. 8.90 9.70 3.00 91.8%

Builders FirstSource, Inc. 13.33 16.69 6.50 79.9%

The Home Depot, Inc. 134.10 139.00 109.62 96.5%

Lowe's Companies, Inc. 76.01 83.65 62.62 90.9%

Universal Forest Products Inc. 109.78 110.97 57.11 98.9%

Median $61.17 $66.31 $44.57 93.2%

MRO / Specialty Product Distributors

W.W. Grainger, Inc. $230.41 $239.95 $176.85 96.0%

Watsco Inc. 148.45 149.99 106.58 99.0%

WESCO International Inc. 62.93 63.90 34.00 98.5%

Wolseley plc 59.26 59.86 43.15 99.0%

Median $105.69 $106.95 $74.87 98.7%

Residential Focused Building Product Manufacturers

American Woodmark Corp. $87.50 $89.89 $57.04 97.3%

Griffon Corporation 16.91 19.24 13.45 87.9%

Masco Corporation 35.31 37.38 23.10 94.5%

Mohawk Industries Inc. 214.95 214.98 148.56 100.0%

PGT, Inc. 11.84 14.05 8.69 84.3%

Quanex Building Products Corporation 19.68 21.66 15.33 90.9%

The Sherwin-Williams Company 285.13 312.48 218.27 91.2%

Simpson Manufacturing Co., Inc. 44.86 44.89 30.25 99.9%

USG Corporation 27.26 31.14 15.85 87.5%

Median $35.31 $37.38 $23.10 91.2%

Commercial Focused Building Product Manufacturers

Lennox International, Inc. $162.24 $164.02 $105.65 98.9%

Valmont Industries, Inc. 132.47 145.94 92.33 90.8%

Median $147.36 $154.98 $98.99 94.8%

Construction Materials

CEMEX, S.A.B. de C.V. $8.53 $9.09 $3.50 93.8%

CRH plc 34.24 34.74 21.76 98.6%

Eagle Materials Inc. 80.49 87.57 45.03 91.9%

Granite Construction Incorporated 48.86 51.35 28.45 95.2%

LafargeHolcim Ltd. 53.50 60.80 34.22 88.0%

Martin Marietta Materials, Inc. 180.95 206.36 108.31 87.7%

MDU Resources Group Inc. 24.02 24.67 15.58 97.4%

Monarch Cement Co. 36.75 39.25 28.50 93.6%

United States Lime & Minerals, Inc. 64.55 66.62 45.56 96.9%

U.S. Concrete, Inc. 50.52 69.66 40.42 72.5%

Vulcan Materials Company 112.96 127.20 78.83 88.8%

Median $50.52 $60.80 $34.22 93.6%

Decking

Boise Cascade Company $26.24 $33.15 $13.80 79.2%

Potlatch Corporation 39.10 39.91 24.01 98.0%

Trex Co. Inc. 61.84 64.36 31.11 96.1%

Universal Forest Products Inc. 109.78 110.97 57.11 98.9%

Weyerhaeuser Co. 32.17 33.17 22.06 97.0%

Median $39.10 $39.91 $24.01 97.0%

1-Year Historical Stock Performance

For the Period Ended September 6, 2016

60%

80%

100%

120%

140%

160%

S&P 500 Decking

Lumber & Material Suppliers MRO / Specialty Distributors

Residential Building Products Commercial Building Products


5-Year Historical Stock Performance


0%

100%

200%

300%

400%

500%S&P 500 Decking

Lumber & Material Suppliers MRO / Specialty Distributors

Residential Building Products Commercial Building Products


Market Data Provided by S&P Capital IQ

Decking: NYSE:BCC, NasdaqGS:PCH, NYSE:TREX, NasdaqGS:UFPI,

NYSE:WY

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Building Products Industry Analysis

Industry Financial Analysis


($ in millions) YoY Change

Last Twelve Months LTM Margins LTM LTM Margins Previous Year

Revenue EBIT EBITDA Gross EBIT EBITDA Revenue Gross EBIT EBITDA


Beacon Roofing Supply, Inc. $3,740.5 $203.2 $285.1 24.1% 5.4% 7.6% 52.4% 4.4% nm nm

Bluelinx Holdings Inc. 1,929.3 22.8 32.7 12.0% 1.2% 1.7% (2.3%) 5.5% nm 66.3%

Builders FirstSource, Inc. 5,806.3 188.1 301.0 25.4% 3.2% 5.2% nm 10.5% nm nm

The Home Depot, Inc. 92,033.0 12,640.0 14,566.0 34.2% 13.7% 15.8% 7.8% 0.0% 15.0% 13.9%

Lowe's Companies, Inc. 61,090.0 5,979.0 7,553.0 34.7% 9.8% 12.4% 5.9% (0.1%) 16.6% 12.6%

Universal Forest Products Inc. 2,970.1 159.4 200.8 14.9% 5.4% 6.8% 5.9% 17.8% 48.5% 36.5%

Median $4,773.4 $195.6 $293.0 24.8% 5.4% 7.2% 5.9% 5.0% 16.6% 25.2%


W.W. Grainger, Inc. $10,081.4 $1,283.0 $1,472.6 41.2% 12.7% 14.6% 0.5% (4.5%) (10.6%) (9.1%)

Watsco Inc. 4,146.7 332.3 352.1 24.4% 8.0% 8.5% 2.5% (0.1%) 1.4% 1.7%

WESCO International Inc. 7,473.0 353.8 409.7 19.8% 4.7% 5.5% (4.3%) (1.8%) (18.6%) (16.5%)

Wolseley plc 18,374.2 1,110.4 1,319.8 28.2% 6.0% 7.2% 2.6% 0.8% 3.4% 2.5%

Median $8,777.2 $732.1 $864.8 26.5% 7.0% 7.8% 2.6% 0.3% 2.4% 2.1%


American Woodmark Corp. $974.0 $101.4 $115.4 21.4% 10.4% 11.8% 15.3% 9.4% 56.0% 52.2%

Griffon Corporation 1,958.6 106.1 175.8 24.0% 5.4% 9.0% (4.0%) 1.6% 8.8% 5.4%

Masco Corporation 7,275.0 1,051.0 1,182.0 32.9% 14.4% 16.2% 2.6% 7.7% 25.4% 22.0%

Mohawk Industries Inc. 8,631.0 1,201.8 1,591.1 31.6% 13.9% 18.4% 9.7% 9.5% 31.5% 27.1%

PGT, Inc. 412.9 49.2 61.0 29.7% 11.9% 14.8% 15.3% (4.1%) 2.3% 8.8%

Quanex Building Products Corporation 874.5 45.1 95.6 23.6% 5.2% 10.9% 42.4% 10.3% nm 94.4%

The Sherwin-Williams Company 11,550.4 1,748.5 1,947.4 50.2% 15.1% 16.9% 2.2% 6.4% 15.0% 13.3%

Simpson Manufacturing Co., Inc. 830.4 129.9 156.7 46.6% 15.6% 18.9% 8.0% 3.9% 30.5% 23.0%

USG Corporation 3,869.0 460.0 602.0 19.7% 11.9% 15.6% 1.7% 11.5% 37.7% 24.6%

Median $1,958.6 $129.9 $175.8 29.7% 11.9% 15.6% 8.0% 7.7% 27.9% 23.0%


Lennox International, Inc. $3,523.5 $406.0 $466.7 28.5% 11.5% 13.2% 4.0% 5.1% 19.9% 16.6%

Valmont Industries, Inc. 2,503.3 248.7 332.9 25.7% 9.9% 13.3% (13.1%) 4.0% (5.4%) (6.6%)

Median $3,013.4 $327.4 $399.8 27.1% 10.7% 13.3% (4.6%) 4.5% 7.3% 5.0%


CEMEX, S.A.B. de C.V. $13,180.7 $1,626.7 $2,519.7 34.1% 12.3% 19.1% 13.5% 2.0% 20.0% 18.4%

CRH plc 30,267.8 1,871.7 3,073.0 31.8% 6.2% 10.2% 35.1% 7.3% 68.2% 60.8%

Eagle Materials Inc. 1,156.0 241.8 337.5 24.0% 20.9% 29.2% 6.5% 0.6% 5.4% 8.0%

Granite Construction Incorporated 2,425.6 99.0 161.5 12.9% 4.1% 6.7% 5.5% 22.7% nm 40.1%

LafargeHolcim Ltd. 29,067.1 (345.4) 2,091.6 30.7% (1.2%) 7.2% 52.5% (30.3%) nm nm

Martin Marietta Materials, Inc. 3,435.4 610.4 878.7 24.4% 17.8% 25.6% 8.0% 19.9% 38.5% 23.4%

MDU Resources Group Inc. 4,296.8 312.2 546.1 16.1% 7.3% 12.7% 5.8% 0.0% 2.9% 7.1%

Monarch Cement Co. 160.7 24.6 39.5 25.3% 15.3% 24.6% 13.2% 19.5% 77.3% 40.8%

Texas Industries Inc. 912.1 25.9 103.3 11.0% 2.8% 11.3% 0.0% 0.0% 0.0% 0.0%

United States Lime & Minerals, Inc. 134.8 21.4 37.5 34.7% 15.9% 27.8% (1.6%) 3.6% 1.8% 2.9%

U.S. Concrete, Inc. 1,079.5 77.9 127.3 20.5% 7.2% 11.8% 36.1% 3.4% 51.2% 51.8%

Vulcan Materials Company 3,607.3 680.3 961.3 27.8% 18.9% 26.6% 14.3% 26.8% 67.5% 40.7%

Median $2,930.5 $170.4 $441.8 24.8% 9.8% 15.9% 10.6% 3.5% 29.3% 23.4%

Decking

Boise Cascade Company $3,792.6 $100.5 $163.1 13.3% 2.7% 4.3% 5.0% (6.1%) (28.3%) (15.9%)

Potlatch Corporation 581.9 56.9 95.8 18.2% 9.8% 16.5% (0.8%) (23.7%) nm nm

Trex Co. Inc. 461.4 93.8 108.3 37.5% 20.3% 23.5% 8.0% 1.6% 15.1% 12.4%

Universal Forest Products Inc. 2,970.1 159.4 200.8 14.9% 5.4% 6.8% 5.9% 17.8% 48.5% 36.5%

Weyerhaeuser Co. 7,508.0 1,116.0 1,643.0 20.2% 14.9% 21.9% 18.7% (7.0%) 13.0% 11.2%

Median $2,970.1 $100.5 $163.1 18.2% 9.8% 16.5% 5.9% (6.1%) 14.0% 11.8%

Source: Capital IQ

5


Industry Valuations


($ in millions) Enterprise Enterprise Value / LTM

Market Cap Value* LTM EBITDA Capital Revenue EBIT EBITDA


Beacon Roofing Supply, Inc. $2,768.1 $3,921.7 4.2x 43.0% 1.0x 19.3x 13.8x

Bluelinx Holdings Inc. 80.4 495.3 12.9x nm 0.3x 21.8x 15.2x

Builders FirstSource, Inc. 1,467.6 3,399.8 6.4x nm 0.6x 18.1x 11.3x

The Home Depot, Inc. 165,690.4 182,615.4 1.4x 12.6% 2.0x 14.4x 12.5x

Lowe's Companies, Inc. 66,482.9 80,246.9 2.1x 23.8% 1.3x 13.4x 10.6x

Universal Forest Products Inc. 2,229.4 2,228.8 0.4x 3.8% 0.8x 14.0x 11.1x

Median $2,498.7 $3,660.7 3.1x 18.2% 0.9x 16.3x 11.9x


W.W. Grainger, Inc. $13,922.0 $15,986.2 1.5x 16.3% 1.6x 12.5x 10.9x

Watsco Inc. 4,844.9 5,353.1 0.8x 5.5% 1.3x 16.1x 15.2x

WESCO International Inc. 2,660.7 3,942.2 3.5x 54.3% 0.5x 11.1x 9.6x

Wolseley plc 14,745.8 16,479.1 2.7x 24.0% 0.9x 14.8x 12.5x

Median $9,383.4 $10,669.7 2.1x 20.2% 1.1x 13.7x 11.7x


American Woodmark Corp. $1,426.8 $1,231.8 0.2x 1.7% 1.3x 12.2x 10.7x

Griffon Corporation 723.2 1,584.9 5.3x nm 0.8x 14.9x 9.0x

Masco Corporation 11,659.9 13,739.9 2.5x 25.7% 1.9x 13.1x 11.6x

Mohawk Industries Inc. 15,939.3 18,814.2 1.9x 18.5% 2.2x 15.7x 11.8x

PGT, Inc. 579.5 801.0 4.1x 43.3% 1.9x 16.3x 13.1x

Quanex Building Products Corporation 673.6 953.9 3.2x 44.8% 1.1x 21.1x 10.0x

The Sherwin-Williams Company 26,295.2 28,037.8 1.1x 8.2% 2.4x 16.0x 14.4x

Simpson Manufacturing Co., Inc. 2,170.7 1,924.4 0.0x 0.0% 2.3x 14.8x 12.3x

USG Corporation 3,978.7 5,330.7 3.4x 51.2% 1.4x 11.6x 8.9x

Median $2,170.7 $1,924.4 2.5x 22.1% 1.9x 14.9x 11.6x


Lennox International, Inc. $7,053.0 $8,073.9 2.3x 15.2% 2.3x 19.9x 17.3x

Valmont Industries, Inc. 2,998.8 3,453.7 2.3x 25.4% 1.4x 13.9x 10.4x

Median $5,025.9 $5,763.8 2.3x 20.3% 1.8x 16.9x 13.8x


CEMEX, S.A.B. de C.V. $11,904.5 $28,172.5 6.5x nm 2.1x 17.3x 11.2x

CRH plc 28,422.0 37,125.7 3.1x 33.6% 1.2x 19.8x 12.1x

Eagle Materials Inc. 3,882.8 4,372.4 1.5x 12.8% 3.8x 18.1x 13.0x

Granite Construction Incorporated 1,934.9 1,782.8 1.6x 13.4% 0.7x 18.0x 11.0x

LafargeHolcim Ltd. 32,468.9 55,558.2 10.8x 69.8% 1.9x nm nm

Martin Marietta Materials, Inc. 11,479.0 13,239.8 2.0x 15.6% 3.9x 21.7x 15.1x

MDU Resources Group Inc. 4,691.2 6,608.4 3.6x 42.4% 1.5x 21.2x 12.1x

Monarch Cement Co. 141.9 145.1 0.2x 4.4% 0.9x 5.9x 3.7x

United States Lime & Minerals, Inc. 359.0 296.1 0.0x 0.0% 2.2x 13.9x 7.9x

U.S. Concrete, Inc. 765.5 1,106.0 3.5x 57.7% 1.0x 14.2x 8.7x

Vulcan Materials Company 15,031.8 16,922.5 2.1x 13.2% 4.7x 24.9x 17.6x

Median $4,691.2 $6,608.4 2.1x 14.4% 1.9x 18.0x 11.6x

Decking

Boise Cascade Company $1,016.8 $1,386.9 2.9x 45.8% 0.4x 13.8x 8.5x

Potlatch Corporation 1,584.3 2,145.2 6.1x 37.0% 3.7x nm nm

Trex Co. Inc. 1,911.1 1,951.5 0.4x 2.3% 4.2x 20.8x 18.0x

Universal Forest Products Inc. 2,229.4 2,228.8 0.4x 3.8% 0.8x 14.0x 11.1x

Weyerhaeuser Co. 24,086.6 32,970.6 5.7x 38.8% 4.4x 29.5x 20.1x

Median $1,911.1 $2,145.2 2.9x 37.0% 3.7x 17.4x 14.6x

Total Debt /

Source: Capital IQ

6


LTM Growth and Profitability Matrix


5.0%

8.0%

11.0%

14.0%

17.0%

20.0%

(5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

LT

M E

BIT

DA

Marg

in

3 - Year Revenue CAGR

= Total Enterprise Value for Decking Companies

22.6x LTM EBITDA

11.1x LTM EBITDA

8.5x LTM EBITDA

20.1x LTM EBITDA

Lumber & Building

Materials Median

11.9x LTM EBITDA

MRO / Specialty

Distributor Median

11.7x LTM EBITDA

Residential Building

Products Median

11.6x LTM EBITDA

Commercial Building

Products Median

13.8x LTM EBITDA

Construction

Materials Median

11.6x LTM EBITDA

18.0x LTM EBITDA

5-Year TEV / EBITDA


5.0x

8.0x

11.0x

14.0x

17.0x

20.0x

Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16

S&P 500 Decking Lumber & Material Suppliers

MRO / Specialty Distributors Residential Building Products Commercial Building Products


Source: Capital IQ

7


Building Products M&A Trends

Although residential construction has displayed regular

cyclicality, strong new housing construction trends,

coupled with increased activity in residential repair and

improvement, are expected to drive activity in the

segment. According to the Construction Backlog Indicator

(“CBI”), the national average construction backlog currently

sits at 8.4 months, increasing most rapidly in the West and

Northeast regions. Building costs rose 3.5% year-over-

year throughout 2015, and continue trending upwards

thus far in 2016. While at a lower rate than experienced

throughout 2014 and 2015, retail vacancies continue to

decline by -0.1% per quarter, and settled near 5.5%

nationally in Q2 2016. Overall sentiment remains high in

the sector, as M&A activity continues to flourish in 2016.

M&A Transaction History

January 1, 2007 – September 6, 2016

Date Target Acquirer

Jun-16Idaho Western

Idaho Western distrubutes and sells building products, including sheathing and decking products.Universal Forest Products

Jun-16Robbbins Treating & Manufacturing

Robbins Treating and Manufacturing, Certain Assets comprises five wood treating operations.Universal Forest Products

Apr-16Central Idaho Timberlands

172,000 Acres of Central Idaho Timberlands were acquired by SPP Land LLC. The lumber is expected to be used to procure decking and other finished wood products.SPP Land

Apr-16Icopal

Icopal develops and produces roofing and waterproofing products.Standard Industries

Jan-16Clubhouse Deck & Rail

Clubhouse Deck and Rail Business of Deceuninck North America, LLC was acquired by The Tapco Group.The Tapco Group

Mar-15Martin Fireproofing Corporation

Martin Fireproofing Corporation manufactures, sells, and installs specialty roof deck solutions.Innovative Metals Company

Feb-15Rapid Wood Manufacturing

Rapid Wood Manufacturing engages in the manufacture of finished wood products for a variety of end market applications.Universal Forest Products

Mar-14Upshur Forest Products

Upshur Forest Products, LLC owns sawmill facilities.Universal Forest Products

Nov-13SE Panel & Lumber Supply

SE Panel and Lumber Supply, LLC provides sales, marketing, and distribution services to industrial markets specializing in the concrete forming and scaffolding segments.Universal Forest Products

Sep-13Norcros

Norcros plc, together with its subsidiaries, develops, manufactures, markets, and exports home consumer products in the United Kingdom and South Africa.Lifestyle Investments

Dec-12Kleer Lumber

Kleer Lumber, LLC manufactures free foam cellular poly vinyl chloride ("PVC") trim boards for dealers and contractors in the United States.The Tapco Group

Dec-12TimberTech

TimberTech Limited engages in the research, development, manufacture, and marketing of composite wood decking, railing and lighting.AZEK Building Products

Dec-12VAST Enterprises

VAST Enterprises, LLC manufactures composite pavers.AZEK Building Products

Dec-11Western Forest Products

Western Forest Products Inc. operates as an integrated softwood forest products company.Brookfield Asset Management

Aug-09Correct Building Products

Correct Building Products, LLC designs and manufactures polypropylene based composite decking products for outdoor living.Standard Industries

Dec-08Sensibuilt Building Solutions

Sensibuilt Building Solutions LLC was acquired by Fiber Composites, LLC. Sensibuilt Building Solutions LLC provides building materials to the homeowners.Fiber Composites, LLC

Feb-08Composatron Composite Technology

Composatron Composite Technology manufactures and distributes wood composite products.AZEK Building Products

Oct-07Louisiana-Pacific - Composite Decking Plant

Fiber Composites, LLC acquired composite decking plant in Meridian, Idaho of Louisiana-Pacific Corp. Fiber Composites, LLC

Jan-07Procell Decking

Procell Decking, Inc. engages in the development and manufacture of decking products.CPG International

Source: CapitalIQ

8


RECENT TRANSACTIONS

BUILDING PRODUCTS

INDUSTRIAL & CONSUMER

BUSINESS SERVICES, HEALTHCARE & IT

9


LEAGUE PARK OVERVIEW

League Park Advisors, LLC (“League Park”) is a boutique investment banking firm committed to advising clients on strategies to try and

maximize shareholder value. League Park counsels its clients on monetizing business value through sales and recapitalizations,

enhancing corporate value through strategic acquisitions, and raising capital to fuel growth.

League Park’s senior bankers have decades of investment banking and M&A experience, completing over 300 transactions in the past

25 years.* The League Park team pledges to provide sophisticated, specialized attention at every stage of the transaction process with

a unique blend of financial, strategic, and operational expertise.

Advisory Capabilities:

Sell-Side and Buy-Side Mergers and Acquisitions

Recapitalizations and Refinancings

Capital Raising

Valuations and Fairness Opinions

Strategic Alternatives

Other Financial, Strategic, and Operational Guidance

Industry Expertise:

Business Services

Consumer and Retail

Healthcare

Technology

Industrial

Automotive

Building Products and Construction

Distribution

Industrial and Specialty Gas

Industrial Services

Metals

Paper, Print, and Packaging

Specialty Chemicals

Specialty Glass

*Transactions represent personal experience of certain members of League Park Advisors, LLC and may have been completed while employed at other firms.

For more information, please contact:

Building Products and Construction:

Wayne A. Twardokus

(216) 455-9989

[email protected]

To learn more about League Park, please contact:

Sean Dorsey

Founder and Managing Director

(216) 455-9990

[email protected]

1100 Superior Avenue East, Suite 1650

Cleveland, Ohio 44114

(216) 455-9985

or visit us at: www.leaguepark.com

10


SOURCES AND D ISCLOSURE Sources Referenced

Capital IQ

Company Investor Presentations

Equity Research

FMI Corporation

JLL

McGraw-Hill Construction

Pitchbook

SEC Filings and Forms (EDGAR)

Standard & Poor’s

The Freedonia Group

U.S. Department of Commerce

U.S. Department of Transportation

The Freedonia Group

Research materials for the preceding report were provided by The Freedonia Group. Founded in 1985, the Freedonia Group is a

leading international business research company that publishes more than 100 industry research studies annually. These reports

include product and market forecasts, industry trends, threats and opportunities, competitive strategies, market share determinations

and company profiles. More than 90% of the industrial companies in the Fortune 500 use The Freedonia Group research to help with

their strategic planning.

www.freedoniagroup.com

Disclosure

The preceding report has been prepared by League Park. This report is an overview and analysis of the industry and consolidation trends and is

not intended to provide investment recommendations on any specific industry or company. It is not a research report, as such term is defined

by applicable law and regulations. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial

instruments or to participate in any particular trading strategy. In addition, this report is distributed with the understanding that the publisher

and distributor are not rendering legal, accounting, financial or other advice and assume no liability in connection with its use. This report does

not rate or recommend securities of individual companies, nor does it contain sufficient information upon which to make an investment

decision. Any projections, estimates, or other forward looking statements contained in this report involve numerous and significant subjective

assumptions and are subject to risks, contingencies, and uncertainties that are outside of our control, which could and likely will cause actual

results to differ materially.

These materials are based solely on information contained in publicly available documents and certain other information provided to League

Park, and League Park has not independently attempted to investigate or to verify such publicly available information, or other information

provided to League Park and included herein or otherwise used. League Park has relied, without independent investigation, upon the accuracy,

completeness and reasonableness of such publicly available information and other information provided to League Park. These materials are

intended for your benefit and use and may not be reproduced, disseminated, quoted or referred to, in whole or in part, or used for any other

purpose, without the prior written consent of League Park. Nothing herein shall constitute a recommendation or opinion to buy or sell any

security of any publicly-traded entity mentioned in this document.

Securities offered through SFI Capital Group, LLC, Member FINRA, Member SIPC and the affiliated broker-dealer of League Park Advisors, LLC

building products industry update: wood &...

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