SRS Distribution Inc.
Building a Best in Class Roofing Distributor
AEA’s Middle Market Private Equity (“MMPE”) fund identified roofing distribution as an attractive industry for investment based on: its powerful economies of scale which enabled consolidators to drive superior returns; its large and fragmented market structure, which created a long runway for consolidation; its repair-driven demand characteristics, which insulated the business from the construction cycle; and its specialized, high touch customer service which enabled roofing distributors with superior operating models to differentiate themselves. To pursue this thesis, AEA MMPE formed a partnership with Ron Ross, a roofing industry veteran, to identify potential acquisition targets in the space. After 18 months of sourcing activity, AEA MMPE and Ron purchased their initial platform, which consisted of seven branches in Florida.
Throughout the course of the investment, AEA MMPE worked with Ron to scale the business as it generated rapid growth. Key initiatives supported by AEA MMPE included: recruiting an outstanding senior management team, which in turn created a culture that enabled SRS Distribution, Inc. (“SRS”) to attract the top talent in the industry; investing in training and mentorship programs to create a deep pipeline of promotable talent; acquiring 27 businesses and opening 36 greenfield locations; and evolving the capital structure of the business to support its rapid growth. By the time AEA MMPE exited the business five years after its initial investment, SRS had grown to become the fifth largest roofing distributor in North America.
Acquisitions completed in five years
Greenfield locations opened in five years
Sites at exit, up from seven at entry
“Given my long history in building products, I knew there was a tremendous opportunity in 2008 to build a unique, best in class roofing platform by focusing on culture, the employee experience and superior customer service. I chose AEA to be my partner based on their industry experience and prior successes in building businesses, as well as their shared vision for what SRS could become. Ultimately, we were successful in identifying the initial platform investment in Florida and then accelerating the growth via acquisitions and greenfields. AEA was a truly value-added partner using their strategic and capital resources to support our growth and really helped us achieve SRS’ mission to be the premier roofing distributor.”