Sequoia Supply Merges With New York Firm

Sequoia Supply, one of the nation’s major wholesalers of wood siding and related products, and New York-based Grip-Rite Group merged Tuesday in a $125-million deal that creates the largest independent building products distributor in the country.

The combined, privately held firm, to be called PrimeSource Inc., will be headquartered in Irvine.

It will have 1,000 employees, 46 distribution centers and sales of about $450 million this year, said Richard D. Passaglia, vice president of marketing for the new firm.

“It is a good marriage,” he said. “Sequoia is basically wood products--plywood, paneling, sidings, particle board and some specialty items like windows, doors and ceramic tile. Grip-rite is mainly nails and other fasteners.”

Paul W. Hylbert, president of Sequoia Supply, will be president of the new company, while Marvin E. Miller, chairman of the Grip-Rite Group of White Plains, N.Y., will be chairman. The two men will share the title of chief executive officer.

The intended merger of Sequoia and Grip-Rite was announced in August, 1988, and officials said at the time that they hoped to complete the deal within 90 days.

But instead the process took 18 months, largely because it involved merging eight separate companies--seven of them part of Grip-Rite--and creating an Employee Stock Ownership Plan that put up $25 million for a 30% stake in the merged company.

PrimeSource has a net worth of about $75 million, Passaglia said. The entire deal was valued at $125 million because of additional credit lines that have been extended and because of costs associated with the merger.

“There were eight separate teams of attorneys working on this,” Passaglia said.

Grip-Rite gives Sequoia access to distribution centers in 11 new locations. “They bring us into the Northeast for the first time and get us back into the Northwest” for the first time since 1982, Passaglia said.

Sequoia was founded in 1948 and was acquired in 1975 by Wickes Cos. When Wickes went into Chapter 11 bankruptcy proceedings in 1982, it shut down Sequoia distribution centers in Portland, Ore., and Tacoma, Wash.

The company regained its independence in 1987 in a management-led buyout after Wickes Chairman Sanford C. Sigoloff decided that Sequoia’s wholesale operations did not fit Wickes’ retailing image.

Before Tuesday’s merger, Sequoia had 750 employees in 33 locations, including its corporate headquarters in Irvine and a distribution center in Orange. The company’s annual sales hit $300 million last year, Passaglia said. California Business ranks it as the ninth largest privately held firm in Orange County.

Grip-Rite, which included seven companies with overlapping ownerships, had 250 employees, 13 distribution centers and $150 million annually in sales.