acquisition of roofing supply...

Strategic combination of two leading roofing distributors

Acquisition of Roofing Supply Group

July 27, 2015

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Disclaimer

Before we begin, I would like to remind you that during the course of this conference call, management may make statements that are not purely historical facts

or that necessarily depend upon future events, including statements about expected market share gains, forecasted financial performance or other statements

about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, such statements are considered forward-looking statements within the

meaning of Section 21E of the Securities Exchange Act of 1934, as amended. You are cautioned not to place undue reliance on forward-looking statements.

All forward-looking statements are based upon information available to Beacon Roofing Supply on the date hereof. Beacon Roofing Supply undertakes no

obligation to publicly update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-

looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the

forward-looking statements, including risks or uncertainties related to the Company’s growth strategies, including gaining market share, or the Company’s

revenues and operating results being highly dependent on, among other things, the homebuilding industry, asphalt shingle prices and the economy. The

Company may not succeed in addressing these and other risks. Further information regarding factors that could affect the Company’s financial and other

results can be found in the risk factors section of Beacon Roofing Supply‘s most recent annual report on Form 10-K filed with the Securities and Exchange

Commission. Consequently, all forward-looking statements made on this call are qualified by the factors, risks and uncertainties contained therein.

In addition, numerous factors could cause actual results with respect to Beacon Roofing Supply’s proposed acquisition to differ materially from those in the

forward-looking statements, including without limitation, the possibility that the expected synergies, cost savings and tax efficiencies from the proposed

transaction will not be realized, or will not be realized within the expected time period; the risk that the Beacon Roofing Supply and Roofing Supply Group

(RSG) businesses will not be integrated successfully; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and

schedule contemplated by the parties; disruption from the proposed transaction making it more difficult to maintain business and operational relationships; the

risk of customer attrition; the possibility that the proposed transaction does not close, including, but not limited to, due to the failure to satisfy the closing

conditions; and the ability to obtain the debt financing contemplated to fund the cash portion of the transaction consideration and the terms of such financing.

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of the forward-

looking statements contained herein. Other unknown or unpredictable factors could also have material adverse effects on Beacon Roofing Supply’s future

results.

Finally, in no way does this call constitute an offer to sell or the solicitation of an offer to buy any securities of Beacon Roofing Supply or any other issuer, nor

shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under

the securities laws of any such jurisdiction.

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Today’s Presenters

Paul Isabella

President and Chief Executive Officer

Joe Nowicki

Executive Vice President and Chief Financial Officer

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Beacon Roofing Supply’s Acquisition of Roofing Supply Group

Beacon today announced that it has entered into an agreement to acquire RSG in a cash and stock

transaction valued at approximately $1.1 billion

Combined Company to Generate Approximately $3.7 Billion in Revenue Across 356 Locations

$50 Million in Expected Annual Run-Rate Synergies

Positions Combined Company to Better Capitalize on Continued Recovery in Roofing and Housing Markets

Immediately Adjusted EPS Accretive and Provides Significant Tax Attributes

Significantly Expands Beacon’s Geographic Footprint in Southern and Western United States

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148, 148, 148 Purchase Price $1.1 billion in cash and stock

Form of Consideration

$286 million in cash and $291 million in Beacon stock and options (fixed exchange ratio as of

signing)

– RSG’s net debt of $565 million to be refinanced

Synergies $50 million annual run-rate pre-tax synergies

Financial Impact

Immediately accretive to earnings

Significant expected tax attributes, including approximately $130 million in net operating

losses, existing intangible deductions of approximately $190 million and transaction-related

deductions of approximately $50 million

Combined company is expected to generate significant cash flow

Transaction Financing

$1.1 billion in fully committed financing associated with the acquisition

– Anticipated allocation of debt instruments:

• $700 million 5-year ABL, $350 million drawn at close for transaction financing purposes

• $450 million 7-year Term Loan B

• $300 million 8-year Senior Unsecured Notes

Governance As a result of the acquisition, CD&R will own approximately ~15% of the pro forma company

CD&R will also have two seats on the board of the combined company

Timing and Closing

Conditions

Customary regulatory approvals and closing conditions

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Transaction Overview and Economics

A $1.1bn purchase price is expensive relative to 2015 EBITDA at 14.0x, but run-rate adjustments and synergies make the

multiple more reasonable at 7.8x

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Residential Reroofing

45%

Residential New Construction

17%

Commercial New Construction

5%

Commercial Reroofing

33%

Eastern U.S.36%

Central U.S.34%

Western U.S.30%

Overview of Roofing Supply Group

Founded in 1981 in Houston, TX (Headquartered in Dallas, TX)

RSG is a leading wholesale distributor of roofing supplies in the U.S.

Distributes its products to contractors, builders, architects and building

owners through 83 branches in 24 states of the U.S.

Operates through two segments, Residential (62% of 2014 sales) and

Commercial (38% of 2014 sales)

‒ 78% related to re-roofing

More than 20,000 SKUs spread across both residential and commercial

products

Owned by Clayton Dubilier & Rice since 2012

2014 Revenue: $1.1 billion

Business Overview Long-Standing Supplier Relationships

Source: Company website, management presentation.

Note: RSG’s fiscal year ends December 31.

78% Re-roofing

By Geography By End Market

FY2014 Revenue: $1.1bn

Revenue Breakdown (FY2014)

Supplier Supplier Tenure (Years) Tenure (Years)

~15

~15

>25

~15

>25

>25

>25

>25

Diversified and Loyal Customer Base

80%

2014 Sales to Top Customers

Top 50 Customers: 20%



80%

RSG sells to a diverse and highly

fragmented customer base

– Customer base of more than

7,000 active roofing contractors,

home builders and retailers

– No single customer accounted for

more than 1.6% of 2014 sales

– Top 100 represented only 29% of

sales

– RSG’s extensive branch footprint

allows for service to both local

and national customers

Top Suppliers

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Roofing Supply Group History of Growth

1981

1984

1988 1990

1992 1993–2001

2002 2004

2005

2006

2007

2010

2011

2012

2013 2014

2015

Nov 16,

2014

Ron Pugh

Opened First

Branch in

Houston, TX

Ft Worth

Opens

Austin

Opens

First Branch on

West Coast

Opens (Oakland)

RSG Hits

$500M in

Annual Sales

The Sterling

Group Acquires

RSG

Acquired

Northwest

Roofing Supply in

Oklahoma City

CD&R Acquires

RSG from The

Sterling Group

Acquired Supreme

Building Products in

Tuscaloosa, AL

Achieved $1

Billion in in

Annual Sales

5 New Branch

Openings

through June

Dallas Branch

Opens (Vin Perella

Joins RSG)

First Branch Outside

of Texas Opens

(New Orleans)

15 New Branch

Openings

8 New Branch

Openings Increased

Branch Count to 40

5 New Branch

Openings

Acquired CRI in Northern

California and

Intermountain Supply in

Washington

8 New

Branch

Openings

9 New Branch

Openings

Source: Company management presentation.

Acquisition and Growth History (1981-Present)

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Benefits for Key Stakeholders

Customers

Expanded geographic footprint

Broader range of industry-leading products

Larger fleet for deliveries and service readiness

Employees

Aligns directly with our strategic plan focusing on customer service excellence and

profitable growth

Expanded footprint will provide increased development and career growth

opportunities for talent across both organizations

Superior employee benefits including healthcare, 401K and profit sharing

Partners Strengthen relationships with existing suppliers

Opportunity to participate in a combined company with much greater volumes

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7 Favorable Acquisition Financing

Investment Highlights

Improved Geographic Footprint 1

Significant Cash Flow Generation Supports Deleveraging 6

5 Optimal Timing

4 Significant Cost Synergy Potential

3 Better Scale in a Fragmented Market

2 Greater Diversification and Complementary Expertise

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Improved Geographic Footprint

83

Locations

Improved distribution platform with increased exposure to the Southern and Western U.S.

37 locations

Southwest

68 locations

Midwest

111 locations

Northeast

47 locations

Southeast

6 locations

Northwest

61 locations

South Central

Total Pro Forma

Locations: 356(1)

273(1)

Locations

1

Texas Florida

California

+50%

increase in

locations (6 new)

+75%

increase in

locations (12 new)

+46%

increase in

locations (13 new)

Top 5 States YTD Permits

Issued(3)

YTD Y-o-Y

growth(4)

Texas 44,911 8.5%

Florida 25,889 11.5

California 17,748 13.8

North Carolina 15,165 3.7

Georgia 12,964 22.0

Top 5 116,677 10.6%

U.S. 273,372 8.5%

Significant Increase in Presence in the States

with Highest Issuance of Building Permits(2)

Sources: Management and U.S. Census Bureau.

(1) Totals include Canadian locations and are pro forma for the acquisition of ProCoat Systems.

(2) Top Metropolitan Statistical Areas (MSAs) based on 2014 Single Family Home Building Permits per U.S. Census data.

(3) Year to date as of May 2015.

(4) Represents year-over-year growth from YTD period May 2014 to May 2015.

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Residential Roofing

62%

Non-Residential Roofing

38%Residential

Roofing52%


38%

Complementary Building Products

10%

Northeast34%

Southeast22%

South Central18%

Southwest7%

Midwest10%

Northwest1%

Canada8%

Northeast27%

Southeast19%

South Central26%

Southwest11%

Midwest9%

Northwest3%

Canada5%

Northeast14%

Southeast12%

South Central42%

Southwest17%

Midwest8%

Northwest7%

Residential Roofing

48%


37%

Complementary Building Products

15%

Greater Diversification and Complementary Expertise 2

Sales by End Market

Sales by Geography

Pro Forma Beacon RSG

Pro Forma Beacon RSG

Source: Company presentations and filings.

Note: RSG’s figures are calendarized to match Beacon’s fiscal year of 9/30.

FYE 2014

FYE 2014

Incorporate “Complementary expertise in resi and

non-resi markets / operations”

10 ten state

Highest-margin

segment

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16%

Better Scale in a Fragmented Market

Roofing Industry Overview

Roofing is a $21 billion industry(1)

Beacon is the second largest roofing distributor

in North America

Pro forma Beacon sales will be more than $1

billion greater than its next largest competitor

Estimated Roofing Industry Market Share(2)

Source: The Freedonia Group, Pro Sales Magazine.

(1) Represents sales by manufacturers.

(2) Top 4 share estimate based on sales figures in Pro Sales Magazine, May 2015.

(3) Figures may not sum due to rounding.

Rest of Top 4(3)

Company 1: 25%

Company 3: 6%

Company 2: 6%

Others

Other Roofing Suppliers: 48%

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Pro Forma

Number of Roofing Distributors Multi-Regional Roofing Players Top 5 Distributors

1,500

Total

75

Are in more than

one region

Account for

~52%

of industry sales

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Significant Cost Synergy Potential 4

Estimate of Synergy Opportunity Run-Rate Synergies and Timing of Expected Realization

Source: Global management consulting firm.

$30

$47 $50

Year 1 Year 2 Run-Rate

Beacon management anticipates rapidly realizing potential

synergies, reaching near full run-rate by Q2 2017

60% 95% 100%% Achieved

Beacon has successfully acquired and

integrated 28 businesses since its IPO in

2004

Run-rate cost synergies conservatively

represent ~5% of RSG’s 2014 sales

Management, with support of external

consultants, has developed a detailed

plan for the implementation of its cost

synergy initiatives

$50mm

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Optimal Timing: End Markets

New Home Starts (From 2000A – 2016E)

U.S. Spending on Non-Residential Construction

($ in billions)

Both Housing and Non-Residential markets are in the early stages of a significant cyclical recovery.

1,231 1,273 1,359 1,499 1,611 1,716 1,465

1,046 622 445 471 431 535 618 647 747

1,037

338 329 346 349

345 353

336

309

284

109 116 178 245

307 356 362

363

1,569 1,603 1,705

1,848 1,956

2,068

1,801

1,355

906

554 587 609 781

925 1,003 1,109

1,400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E

Long-Term Average: 1,473

$342 $347 $319 $309 $324 $346

$390

$463 $500

$432

$346 $336 $354 $355 $370 $390 $411 $434

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Source: NAHB, FMI Corporation.

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Single Family

Multi Family

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3 3 3 2 7 8 18 8 3 22 17

6 19 11 6 6

107 103 109 110 113 116

116 112

100

96 93

91

93 94

88 83

33 30

31 32 34

37 39

35

26 17

11 11

11 14

17 18

143 136

143 144 154

161 173

155

129 135

120 108

122 118 111 107

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Major Storms Re-roof Demand New Construction

15

20

25

30

35

40

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Year of construction of housing stock 2012 (131.8 million units)

Households in America are getting older…

Median Age of Owner-Occupied Housing

23 years

38 years

88% of U.S. re-roofing demand is non-discretionary

Long-Term Average: 135mm

Change From Peak Levels

% decline from total peak (2005) 38.2%

% decline from major storms peak (2008) 72.7

% decline from reroof peak (2005) 28.4

% decline from new construction peak (2005) 53.8

U.S. Asphalt Shingle Market (Sq. Ft. in mm)

….And most owners are forced to invest in repairs…

Leaks33%

Old33%

Weather Damage

14%

Upgrade Appearance

11%

Deteriorating 7%

Other2%

Source: Asphalt Roofing Manufacturers Association, Summary of Asphalt Roofing Industry Shipments. U.S. Census Bureau. National Association of

Realtors existing home sales and Owens Corning management estimates. ELK. F.W. Dodge.

….While roofing volume is still below long-term averages

Optimal Timing: Roofing Market 5

14

1.5x

Beacon Status Quo03/31/2015

Pro Forma at Close Within 3 Years

Significant Cash Flow Generation Supports Deleveraging

Illustrative Net Debt / Pro Forma EBITDA Strong Deleveraging Profile

• Pro forma net debt of $1.1 billion at

close

– Strong liquidity position with $350mm of

ABL availability for seasonal working

capital needs and acquisitions

• Rapid expected deleveraging driven by:

– Cost synergies realization

– Earnings expansion

– Strong free cash flow generation

enhanced by recovering housing

sector

– Low ongoing capital expenditure

– Utilization of tax attributes, including

approximately $130 million in net

operating losses, existing intangible

deductions of approximately $190

million and transaction-related

deductions of approximately $50

million

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Below ~2.0x in

three years

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Favorable Acquisition Financing

Debt

Anticipated allocation of debt instruments:

– $700 million 5-year ABL, $350 million drawn at close for

transaction financing purposes

– $450 million 7-year Term Loan B

– $300 million of 8-year Senior Unsecured Notes

Estimated Weighted Average Cost of Debt: ~4%(1)

Equity $291 million in new stock and options

Liquidity

7

The current financing environment along with Beacon’s leverage profile provides an opportunity to secure

favorable financing terms

Source: Management.

(1) Does not include $350mm of undrawn ABL at close.

More than $350 million of liquidity at close, including ABL capacity

and excess cash for seasonal working capital requirements and

acquisitions

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Enhances Growth Strategy

Enhanced Free Cash Flow Generation / Expected Deleveraging

Significant Cost Synergies and Tax Attributes

Expands Geographic Presence and Diversity

Optimal Timing

Immediately Accretive to Earnings

An Exciting Opportunity to Drive Growth and Create Significant Shareholder Value

Acquisition Provides Significant Opportunities

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