Builders FirstSource Inc. announced that it has entered into a definitive stipulation to settle the consolidated class and derivative action that was filed in connection with its previously announced recapitalization. The settlement is subject to the approval of the Delaware Court of Chancery.

Builders FirstSource, Inc. announced that it will exchange up to $145 million of newly issued Second Priority Senior Secured Floating Rate Notes due 2016 and up to $130 million in cash from the proceeds of the rights offering in exchange for its outstanding 2012 notes. To the extent the company receives less than $205 million of gross proceeds from the rights offering, JLL and Warburg will exchange their 2012 notes, and other participants in the debt exchange will exchange all or a portion of their 2012 notes, for shares of common stock at an exchange price equal to the subscription price, rather than for the 2016 notes or cash, subject to proration. To the extent the gross proceeds from the rights offering plus the aggregate principal amount of any 2012 notes exchanged for common stock do not equal $205 million, participants in the debt exchange will receive, in exchange for a portion of their 2012 notes, shares of common stock at an exchange price equal to the subscription price. In addition, holders who exchange their 2012 notes in the debt exchange will consent to amend the indenture under which the 2012 notes were issued to eliminate certain restrictive covenants and release the liens on the collateral securing the 2012 notes. Holders of approximately 66 2/3% of the aggregate principal amount of the 2012 notes, excluding JLL and Warburg Pincus, must consent to such amendments to the indenture governing the 2012 notes in order for the amendments to become effective. The company has entered into support agreements with the holders of 82.8% of the aggregate principal amount of the 2012 notes under which such note holders have agreed to exchange their 2012 notes in the debt exchange and consent to the amendments to the indenture governing the 2012 notes.

Builders FirstSource, Inc. said that the company will look at acquisitions. Charles Horn Builders FirstSource, SVP and CFO said, “I think the added liquidity and better capital structure will have us look at acquisitions; it doesn't mean that we're going to go out and start that process immediately. Our goal as a management team is to make sure we have adequate liquidity looking out through this uncertain housing market. And then if we see perhaps the housing market recovering quicker than we anticipate, or being stronger than we anticipate, it could very well be used to try to then grow the business.”