Sequoia Supply of Irvine Agrees to Merge With New York’s Grip-Rite

Barely 16 months after it was spun off from giant Wickes Cos., Sequoia Supply in Irvine has agreed to merge with a New York firm in a deal that would create the nation’s largest independent distributor of home-building materials.

The new company would be owned jointly by the present shareholders of Sequoia and Grip-Rite Group in White Plains, N.Y., Sequoia said Tuesday. Specific terms of the deal between the two privately held firms were not disclosed.

The firms expect to complete the deal within 90 days, but first they must reach a definitive agreement and obtain financing and owner approval. The deal also is subject to Federal Trade Commission review for possible antitrust violations.

“Everyone at both companies will be involved in operation of the new firm,” said Paul W. Hylbert, Sequoia’s president. “We’re not ready to say yet who will be the chairman and the president, but everyone is remaining in management positions.”

No Headquarters Designated

No headquarters has been designated yet, but both the Irvine and White Plains offices are expected to remain open, Hylbert said. He declined to say under what name the company would operate.

The combined firm would be a $425-million company, based on last year’s sales figures, and would be the largest independent distributor of home-building materials, Hylbert said.

“The FTC would look at this deal for antitrust problems because of market coverage and size,” he said. “But we operate in different areas of country with little competition between us, so I don’t expect any problems with getting FTC approval.”

Marvin E. Miller, president of Grip-Rite, said he is “delighted to be joining forces with Sequoia.”

With 750 employees at 33 wholesale distribution centers, Sequoia supplies retail outlets in 30 Western, Southern and Midwest states with such items as lumber, plywood, paneling and roofing insulation. Its revenue last year was $275 million.

Grip-Rite Has 225 Employees

With 225 employees at 10 wholesale distribution centers, Grip-Rite supplies retail stores in 20 Northeast, Atlantic, Midwest and Southwest states with lumber and such metal products as nails and screws. Its revenue last year was $150 million.

Sequoia, founded in 1948, was sold to Wickes in 1975. But early last year, Sanford C. Sigoloff, chairman of Wickes, decided that Sequoia’s wholesale business did not fit Wickes’ “strategic position as a major retailer of building materials.”

In March, 1987, a group of 35 Sequoia managers purchased the division from Wickes in a leveraged buyout financed by General Electric Credit Corp. No purchase price was disclosed, but Hylbert said the group borrowed $60 million to finance the purchase and provide operating capital.

Wickes, through its lumber and Builders Emporium divisions, still is Sequoia’s biggest customer, Hylbert said. But sales to Wickes represent only about 3% of Sequoia’s revenue, he said.

HOW THE COMPANIES COMPARE

Sequoia Supply Grip-Rite Group Headquarters Irvine White Plains, N.Y. 1987 sales $275 million $150 million Distribution centers 33 10 Number of states served 30 20 Employees 750 225