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Business Combinations
 12 Months Ended
Apr. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Business Combinations Business Combinations
The Company accounts for business combinations by recognizing the assets acquired and liabilities assumed at the acquisition date fair value. In valuing certain acquired assets and liabilities, fair value estimates use Level 3 inputs, including future expected cash flows and discount rates. Goodwill is measured as the excess of consideration transferred over the fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to value assets acquired and liabilities assumed at the acquisition date, the Company’s estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments arising from new facts and circumstances are recorded to the Consolidated Statements of Operations and Comprehensive Income (Loss). The results of operations of acquisitions are reflected in the Company’s Consolidated Financial Statements from the date of acquisition. The Company's Consolidated Statement of Operations and Comprehensive Income for the year ended April 30, 2022 included $237.9 million of net sales and $4.6 million of net income from acquisitions made in fiscal 2022. The Company recorded transaction cost of $3.5 million, $1.1 million and $2.4 million during the years ended April 30, 2022, 2021 and 2020, respectively.
Fiscal 2022 Acquisitions
Westside Acquisition
On July 1, 2021, the Company acquired substantially all the assets of Westside Building Material (“Westside”), one of the largest independent distributors of interior building products in the U.S., for preliminary consideration of $140.1 million. Westside is a leading supplier of steel framing, wallboard, ceilings, insulation and complementary building products serving commercial and residential markets. Westside’s distribution network comprises ten locations, including nine across California (Anaheim, Hesperia, Oakland, Chatsworth, Fresno, Lancaster, Santa Maria, San Diego and National City) and one in Las Vegas, Nevada. The acquisition was funded with cash on hand and borrowings under the Company's asset based revolving credit facility. The primary purpose of the transaction was to expand the geographical coverage of the Company and grow the business.
The assets acquired and liabilities assumed were recognized at their acquisition date fair values. The acquisition accounting is subject to change as the Company obtains additional information during the measurement period about the facts and circumstances that existed as of the acquisition date. The primary area of the preliminary acquisition accounting that is not yet finalized relates to settlement of the holdback liability.
The following table summarizes the components of the preliminary consideration:
(in thousands)
Cash consideration$126,608 
Holdback liability13,500 
Total preliminary consideration transferred$140,108 
Included in the total preliminary consideration as of April 30, 2022 is a $13.5 million holdback liability for general representations and warranties of the sellers that is scheduled to be settled 15 months after the acquisition date.
The following table summarizes the preliminary acquisition accounting for this acquisition, and subsequent measurement period adjustments recorded, based on currently available information:
Initial
Acquisition
Accounting		AdjustmentsUpdated
Acquisition
Accounting
(in thousands)
Trade accounts and notes receivable$27,081 $(799)$26,282 
Inventories28,900 (145)28,755 
Prepaid and other current assets228 — 228 
Property and equipment16,687 — 16,687 
Operating lease right-of-use assets20,782 — 20,782 
Customer relationships51,500 — 51,500 
Tradenames11,300 — 11,300 
Goodwill13,351 1,363 14,714 
Accounts payable and accrued expenses(14,375)54 (14,321)
Operating lease liabilities(15,819)— (15,819)
Fair value of consideration transferred$139,635 $473 $140,108 
Goodwill recognized is attributable to synergies achieved through the streamlining of operations combined with improved margins attainable through increased market presence and is attributable to the Company's geographic divisions reportable segment. Goodwill is expected to be deductible for U.S. federal income tax purposes. The estimated useful life for the customer relationships is 12 years and the estimated useful life for the tradenames is 15 years.
Trade accounts and notes receivable had an estimated fair value of $26.3 million and a gross contractual value of $26.4 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.
Ames Acquisition
On December 1, 2021, the Company acquired Ames Taping Tools Holding LLC (“Ames”) for preliminary consideration of $226.7 million in cash. Ames is the leading provider of automatic taping and finishing (“ATF”) tools and related products to the professional drywall finishing industry. Ames operates nearly 100 retail locations servicing professionals in the interior finishing market. The acquisition was primarily funded with borrowings under the Company's asset based revolving credit facility. The primary purpose of the transaction was to expand the Company's complementary product offerings and grow the business.
The assets acquired and liabilities assumed were recognized at their acquisition date fair values. The acquisition accounting is subject to change as the Company obtains additional information during the measurement period about the facts and circumstances that existed as of the acquisition date.  The primary areas of the preliminary acquisition accounting that are
not yet finalized relate to the finalization of working capital adjustments and residual goodwill.
The following table summarizes the preliminary acquisition accounting for this acquisition, and subsequent measurement period adjustments recorded, based on currently available information:
Initial
Acquisition
Accounting		AdjustmentsUpdated
Acquisition
Accounting
(in thousands)
Cash and cash equivalents$10,692 $— $10,692 
Trade accounts and notes receivable9,955 (54)9,901 
Inventories15,464 870 16,334 
Prepaid and other current assets1,941 — 1,941 
Property and equipment6,165 — 6,165 
Operating lease right-of-use assets8,238 (235)8,003 
Customer relationships63,000 (3,000)60,000 
Tradenames53,000 (4,000)49,000 
Patents3,000 — 3,000 
Goodwill104,557 3,383 107,940 
Accounts payable and accrued expenses(14,827)3,170 (11,657)
Deferred tax liability(28,440)1,794 (26,646)
Operating lease liabilities(8,238)235 (8,003)
Fair value of consideration transferred$224,507 $2,163 $226,670 
Goodwill recognized is attributable to expected synergies and the expected value in the potential to expand and enhance the Company's complementary product offerings and is attributable to the Company's other reportable segment. Goodwill is not expected to be deductible for U.S. federal income tax purposes. The estimated useful life for the customer relationships is 11 years and the estimated useful life for the patents is 10 years. Tradenames valued at $26.0 million have an estimated useful life of 15 years and tradenames valued at $23.0 million are expected to have an indefinite useful life.
Trade accounts and notes receivable had an estimated fair value of $9.9 million and a gross contractual value of $11.6 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.
Pro Forma Financial Information
The following table presents the unaudited pro forma consolidated net sales and net income for the Company for the periods indicated:
Year Ended April 30,
20222021
(in thousands)
Net sales$4,718,531 $3,579,882 
Net income281,151 113,478 
The above pro forma results have been calculated by combining the historical results of the Company, Westside and Ames as if the acquisitions of Westside and Ames had occurred on May 1, 2020, the first day of the comparable prior reporting period. The pro forma results include estimates for intangible asset amortization, depreciation, interest expense and income taxes, and are subject to change once final asset values have been determined. The pro forma information is not necessarily indicative of the results that would have been achieved had the transactions occurred on the first day of each of the periods presented or that may be achieved in the future.
Other Acquisitions
On June 3, 2021, the Company acquired the assets of Architectural Coatings Distributors, Inc. (“Architectural Coating”). Architectural Coating is an interior building products distributor in Cleveland, Ohio. On August 2, 2021, the
Company acquired certain assets of DK&B Construction Specialties, Inc. (“DK&B”). DK&B is a distributor of External Insulation and Finishing Systems (“EIFS”) and stucco products through one location in Omaha, Nebraska. On December 1, 2021, the Company acquired the assets of Kimco Supply Company (“Kimco”). Kimco sells building and construction supplies through two locations in the Tampa, Florida area. The impact of these acquisitions is not material to the Company’s Consolidated Financial Statements.
Fiscal 2021 Acquisition
On February 1, 2021, the Company acquired 100% of the outstanding stock of D.L. Building Materials Inc. (“D.L. Building Materials”) for consideration of approximately $38.9 million ($49.9 million Canadian dollars). D.L. Building Materials distributes wallboard, acoustical ceilings, steel framing, insulation and related building products in the Eastern Ontario and Western Quebec markets through two locations in Gatineau, Quebec and Kingston, Ontario.
The assets acquired and liabilities assumed were recognized at their acquisition date fair values. The following table summarizes the acquisition accounting:
Preliminary
Acquisition
Accounting		AdjustmentsFinal
Acquisition
Accounting
(in thousands)
Cash$4,179 $— $4,179 
Trade accounts and notes receivable8,325 (24)8,301 
Inventories5,075 (8)5,067 
Prepaid and other current assets675 — 675 
Property and equipment2,721 — 2,721 
Operating lease right-of-use assets1,103 — 1,103 
Customer relationships20,926 (476)20,450 
Tradenames2,498 — 2,498 
Goodwill9,084 — 9,084 
Liabilities assumed(12,282)(45)(12,327)
Deferred income taxes(2,830)— (2,830)
Fair value of consideration transferred$39,474 $(553)$38,921 
Goodwill recognized is attributable to synergies achieved through the streamlining of operations combined with improved margins attainable through increased market presence and is all attributable to the Company's geographic divisions reportable segment. Goodwill is not deductible for U.S. federal income tax purposes. The pro forma impact of this acquisition is not presented as it is not considered material to the Company's Consolidated Financial Statements.
Fiscal 2020 Acquisitions
In fiscal 2020, the Company completed the following acquisitions, with an aggregate purchase price of $24.9 million of cash consideration. The purpose of these acquisitions was to expand the geographical coverage of the Company and grow the business.
Company NameForm of AcquisitionDate of Acquisition
J.P. Hart Lumber CompanyPurchase of net assetsJune 3, 2019
Rigney Building Supplies Ltd.
Purchase of 100% of outstanding common stock
November 1, 2019
Trowel Trades Supply, Inc.Purchase of net assetsFebruary 1, 2020