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Beacon Roofing Acquires EIS to Boost Insulation Business

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The distributor of residential and non-residential roofing materials, Beacon Roofing Supply, Inc. (BECN - Free Report) has acquired Eco Insulation Supply (EIS). This buyout will expand Beacon Roofing’s existing insulation business. Financial terms of the transaction remain undisclosed.

Located in Stamford, CT, EIS is a distributor of insulation and related accessories serving Connecticut, Southern New England and the New York City metropolitan area. EIS’s strong reputation with contractors will provide great support to Beacon Roofing’s insulation footprint.

Moreover, the EIS acquisition aligns well with Beacon Roofing’s commitment to grow through acquisitions. Starting with the successful acquisition of RSG, the company has completed and integrated seven other acquisitions through fiscal 2016. The company will remain aggressive on the M&A front in the future, along with funding its internal growth initiatives.

Further, Beacon Roofing continued to promote organic greenfield growth with the opening of a new branch in 2016, six new branches in 2015 and 26 new branches in 2014. The company believes that as recent greenfield locations continue to ramp up, and if anticipated synergies and cost savings from buyouts are realized; its margins will continue to improve in the near future.

Beacon Roofing’s share price performance has outperformed the Zacks categorized Building Products-Retail/Wholesale industry  in the past one year. The stock has grown 16.8%, more than the industry’s gain of 2% over the same time frame.

 

Zacks Rank & Key Picks

Beacon Roofing currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Best Buy Co., Inc. (BBY - Free Report) , America's Car-Mart Inc. (CRMT - Free Report) and Bob Evans Farms, Inc. . Best Buy has an average earnings surprise of 25.66% for the last four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

America's Car-Mart also boasts a Zacks Rank #1 and has an average earnings surprise of 15.67% for the trailing four quarters. Bob Evans, another Zacks Rank #1 stock, has an average positive earnings surprise of 14.74% for the past four quarters.

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