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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): December 18, 2023

 

 

 

GMS INC.

(Exact name of registrant as specified in charter)

 

 

 

Delaware   001-37784   46-2931287
(State or Other Jurisdiction
of Incorporation)
  (Commission
File Number)
  (I.R.S. Employer
Identification No.)

 

100 Crescent Centre Parkway, Suite 800
Tucker, Georgia
  30084
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (800) 392-4619

 

 

 

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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.01 per share   GMS   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ¨

 

 

 

 

 

 

Item 7.01. Regulation FD Disclosure.

 

On December 18, 2023, GMS Inc., a Delaware corporation (the “ Company ”), and its wholly owned subsidiary, Empire Construction Supply, Inc., a Georgia corporation (“Purchaser”), entered into an Asset Purchase Agreement (the “Purchase Agreement ”) with the Sellers (as defined therein), the Owners (as defined therein), the Seller Related Principals (as defined therein) and the Sellers’ Representative (as defined therein), pursuant to which, among other things, Purchaser, has agreed to acquire substantially all of the assets of the Sellers (the “ Acquisition ”) for an aggregate purchase price of approximately $317 million on a debt-free, cash-free basis (the “Purchase Consideration”). The Purchase Consideration is subject to a customary net working capital adjustment, as set forth in the Purchase Agreement.

 

The Company expects to fund the Acquisition with cash on hand and borrowings under the Company’s established revolving credit facility. The Purchase Agreement contains customary representations, warranties, indemnification (and related escrows), confidentiality obligations, and other provisions. The Acquisition is expected to close in our fourth quarter fiscal 2024, which ends on April 30, 2024, subject to the satisfaction or waiver of customary closing conditions, including the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

A copy of the press release issued by the Company announcing the proposed Acquisition is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Description
99.1* Press release, dated December 21, 2023.
104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

 

*Furnished herewith

 

 

 

 

SIGNATURES

 

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.

 

  GMS INC.
       
       
Date: December 22, 2023 By: /s/ Scott M. Deakin
    Name: Scott M. Deakin
    Title: Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

 

 

GMS to Acquire Kamco Supply Corporation

Transaction to Significantly Expand GMS’s Presence in the Greater New York City Area

 

TUCKER, Ga.— December 21, 2023 -- GMS Inc. (NYSE: GMS), a leading North American specialty building products distributor, today announced that it has entered into an agreement to acquire Kamco Supply Corporation and affiliates (“Kamco” or the “Company”). The transaction is expected to close during the fourth quarter of fiscal 2024 for GMS, which ends on April 30, 2024.

 

Founded in 1939 by the Swerdlick family, and headquartered in Brooklyn, New York, Kamco is a leading supplier of ceilings, wallboard, steel, lumber, and other related construction products. The Company operates five distribution facilities in the Greater New York City area and services the New York metro and tri-state area. For the 12 months ended June 30, 2023, Kamco recorded revenues of approximately $245 million.

 

John C. Turner, Jr., President, and Chief Executive Officer of GMS, said, “Kamco is a long-established leader in the building materials industry with an experienced and successful team. They are known for exceptional service and have outstanding customer relationships and an impressive suite of products from numerous leading brands, including Armstrong, CertainTeed, National Gypsum, USG, Owens Corning and others. This acquisition represents a unique opportunity to advance GMS’s strategic priorities, including expanding share in our core product categories and continuing to develop our presence in the New York metropolitan market, the largest remaining MSA where we do not have a significant presence. We look forward to continuing Kamco’s impressive legacy of excellence that Allen Swerdlick and his team have built and grown over the last eight decades. We expect the addition of this business to GMS to provide enhanced customer service capability, significant cross-selling opportunities, a strengthened value proposition and a broader suite of top tier-product offerings in the largest metropolitan area in the United States.”

 

Scott Little, President of Kamco said, “We share GMS’s vision of building long-term relationships and providing best-in-class customer service to our customers. As such, we believe that partnering with an industry leader whose values are well aligned with our own presents excellent opportunities for our employees and customers alike, and we look forward to driving continued success as part of GMS.”

 

Transaction Details, Leadership and Closing

 

GMS expects to fund this transaction with cash on hand and borrowings under the Company’s established revolving credit facility.

 

Following the close of the transaction, Kamco’s current President, Mr. Little and its senior leadership team, will continue to lead the business and the Company will continue to operate under the “Kamco” brand as it has for over 80 years.

 

 

 

 

GMS expects to capitalize on cross-selling opportunities with Kamco and GMS’s other operations in the region, including the recently acquired Tanner Bolt and Nut, Inc. business. Expanded Wallboard distribution and Complementary Products expansion present compelling opportunities for the company to better capitalize on potential growth in the market and provide an even higher level of service to customers.

 

The transaction is expected to close in the fourth quarter of GMS’s fiscal year 2024, subject to the satisfaction of customary closing conditions, including HSR approval. At such time, additional information will be made available concerning the transaction.

 

About GMS

 

Founded in 1971, GMS operates a network of over 300 distribution centers with extensive product offerings of Wallboard, Ceilings, Steel Framing and Complementary Products. In addition, GMS operates more than 100 tool sales, rental and service centers, providing a comprehensive selection of building products and solutions for its residential and commercial contractor customer base across

the United States and Canada. The Company’s unique operating model combines the benefits of a national platform and strategy with a local go-to-market focus, enabling GMS to generate significant economies of scale while maintaining high levels of customer service.

 

For more information about GMS, please visit www.gms.com.

 

Forward-Looking Statements and Information –

 

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," or "should," or the negative thereof or other variations thereon or comparable terminology. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. The following important factors could cause the future results, to differ: the company’s growth strategy, changes in economic or industry conditions, competition, inflation and deflation, input costs, timing and integration of acquisitions, timing and implementation of price increases for the Company’s products, consumer markets, and other factors identified our filings with the SEC. We undertake no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise.

 

Contacts

 

Carey Phelps

Vice President, Investor Relations

Phone: 770-723-3369

Email: ir@gms.com

 

 

 

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