Monday, December 4, 2023

NC trend: Van Isley’s savvy shift from accounting to construction

When Van Isley left a 10-year career at Raleigh’s Carolina Builders to start a construction supplies company in 2003, he and his partners had a heady goal of achieving $200 million in revenue within 15 years.

It took Professional Builders Supply 13 years to meet that goal, prompting a new goal of $500 million by 2021. Last year’s revenue soared more than 50% to $700 million as contractors snapped up moldings, doors, windows, lumber and other products amid a historic explosion in demand and prices.

It’s quite a success story for CEO Isley and partners Troy Wilkerson and Steve Lockbaum at a business that started with four outside investors and six employees. By late 2021, Professional Builders employed 685 people with 12 offices in the Carolinas including Charlotte, Raleigh and Wilmington.

Headshot of Van IsleyIsley also skillfully managed ownership transitions as the business grew. In 2017, Raleigh-based Capitol Broadcasting bought a majority stake in Professional Builders, which then had more than 300 staffers. The private company owned by the Goodmon family operates a diversified group of businesses including WRAL-TV, Rocky Mount Mills and the Durham Bulls minor-league
baseball club. 

In December, US LBM, the nation’s largest privately held building products distributor, acquired Professional Builders. Terms weren’t disclosed. Buffalo Creek, Ill.-based US LBM, which was bought by the Bain Capital private-equity group in December 2020, has been on a rapid acquisition spree over the past few years.

Isley grew up in a Burlington family with much building trades experience. He worked for various family members and used his weekend and holiday earnings to pay his way through East Carolina University, earning an accounting degree. He worked at Price Waterhouse in Raleigh for seven years before changing careers.

“I knew my way around a job site for the most part, but in many ways, I was trading in a suit and tie for a pair of boots,” he says. “Obviously, I don’t regret that decision.” 

Isley seized a management-training opportunity in Greenville, S.C. with Carolina Builders, then owned by United Kingdom-based Wolseley. He worked for about 10 years at the company, which is now part of Dallas-based Builders FirstSource.

He and Wilkerson then started their own company. “I had always had entrepreneurial desires and wanted to own my own business,” Isley says. “I had two young children at home, I was traveling a fair amount and I wanted to be there as they grew up. In short, I wanted to control my own destiny.

“Eighteen short years later, we feel that we accomplished
those objectives.”

The Capitol investments enabled three outside investors to exit at fair-market value, Isley says. Additionally, he, Wilkerson and Lockbaum had essentially all of their net worth invested in the company, so reducing risk was important. Lastly, he was seeking a partner that fit culturally and would allow the company to maintain the same processes.

“We did our research, ran a detailed and thorough process, and Capitol emerged as the perfect fit to achieve all of those objectives.”  

Less than four years later, US LBM snapped up the business. Minimal changes in how Professional Builders operates are expected, says Isley, who remains CEO.

“US LBM provides a lot of autonomy,” he says. “The cultures are very similar.”

Isley credits the company’s growth to its customer service, work environment and becoming more efficient as it grew. “We have always believed in investing in great people — maybe before we actually need them,” he says. “That approach allows us to seize opportunities and grow rapidly when those opportunities present themselves.”

Professional Builders also benefited from its fast-growing Carolinas markets with job growth fueling record demand for housing.  

The onset of COVID-19 led to supply shortages and other challenges that continue, Isley says. When the pandemic hit, business slowed for about 45 to 60 days as everyone processed how to move forward. Then, business picked up, sparking pricing pressures for many products.

“There was rampant inflation in the commodity markets, lumber specifically. And there were challenges in being able to get commodities that have since settled back down a little bit and transitioned over to some other product categories,” Isley says. “Things like windows, doors and anything that is imported (have) become problematic. So it’s clearly been a challenge pretty much since the second half of 2020 continuing on through today.” 

Finding labor for construction remains a challenge that is likely to continue, Isley says. Not enough people are willing to do the work to meet the current housing demand.

“We may see some relief in the latter half of 2022 but I don’t envision any significant improvement before then,” Isley says. “Until we see demand cool, we may not see improvement in the related supply chain issues.” 

Partnering with a bigger company provides more resources, new product lines and more purchasing power, he adds. US LBM has annual revenue of more than $3.5 billion and operated 19 sites in the Carolinas before the Professional Builders deal. 

“In a nutshell, the stars aligned,” Isley says. “US LBM had a sizable hole in their geographic footprint in the Carolinas and became very active with their M&A activity at the same time our top-line revenues were soaring as a result of a vibrant housing market here.”

Related Articles