GMS Inc. (“GMS” or the “Company”), a specialty distributor of interior building products, announced that it has entered into a definitive agreement to acquire AMES Taping Tools Holding LLC (“AMES”). AMES is the nation’s foremost provider of automatic taping and finishing (“ATF”) tools and related products to the professional drywall finishing industry. The transaction is expected to close in the Company’s fiscal third quarter 2022 with a purchase price of $212.5 million in cash.

AMES provides a distinctive complement to GMS’s current offerings, significantly expanding the Company’s presence in the attractive tools and fasteners market. AMES’s portfolio includes the industry-leading finishing tool brand, TapeTech, and the top specialty interior finishing e-commerce platform, All-Wall. For the twelve months ended September 30, 2021, AMES achieved net sales of approximately $100 million.

“We are pleased to welcome the AMES team to GMS and provide a full suite of offerings for interior contractors and drywall finishers,” said John C. Turner, Jr., President and Chief Executive Officer of GMS. “AMES has highly-respected brands and an entrepreneurial culture with an attractive growth plan, which all align well with our strategic priorities and provide an excellent opportunity for GMS to expand our presence in the growing ATF tools market. With its multichannel distribution model and strong customer relationships, AMES is expected to generate accretive EBITDA margins for GMS. We believe this transaction will add immediate benefits as part of one of our strategic growth priorities to diversify our core product offerings, and will further position GMS to drive long-term growth and shareholder value.”

Jay Davisson, President and CEO of AMES added, “We are excited about the opportunity to join the GMS team. Like GMS, customer service has been a cornerstone of the AMES business since our founding over 80 years ago. Building on our strong, existing relationships, we are excited to bring our customer-first culture and deep industry matter expertise to GMS to create a best-in-class product and service experience for our customers and growth opportunities for employees.”

AMES services customers through its multichannel distribution model including:

1. AMES Stores – supplies, supports and services residential and commercial interior finishing applications through a network of more than 85 store locations that sell drywall finishing products and provide drywall contractors with the option to purchase or rent ATF tools from a 100,000-tool fleet shared by AMES stores platform-wide.
2. Dealer Distribution – sales of market-leading TapeTech Automatic Taping and Finishing Tools and related TapeTech® branded products through dealers and distributors, including a significant relationship with GMS’s subsidiary, Tool Source Warehouse.
3. All-Wall E-Commerce Platform – Leading E-Commerce retailer of specialty interior finishing tools and related products.

Transaction Details, Leadership and Closing

GMS expects to fund this transaction with cash on hand and borrowings under the Company's ABL credit facility. In connection with this transaction, GMS will be exercising the $100 million accordion within the Company's ABL agreement, increasing the ABL borrowing limit from $445 million to $545 million.

Following the closing of the transaction, AMES’s current management team, including President & CEO Jay Davisson, will continue to lead the business, which will continue to operate under the “AMES” brand – as it has for over 80 years.

GMS expects to leverage its existing relationship with AMES and the sourcing arrangements at GMS’s subsidiary, Tool Source Warehouse, to expand and enhance AMES’s distribution model, better capitalize on available growth opportunities and provide an even higher level of service to customers.

This transaction is expected to close in GMS’s fiscal third quarter of 2022, subject to the satisfaction of customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.