Dive Brief:

• Builders FirstSource, a supplier of homebuilding materials, announced Monday that it will acquire its competitor, ProBuild Holdings, for $1.63 billion.

• The deal would triple the size of eight-year-old, Dallas-based Builders FirstSource, which sells lumber, plywood, engineered wood, gypsum wallboard, and other materials to residential builders.

• The combined company is likely to save up to $120 million a year after the acquisition, according to a statement by Builders.

Dive Insight:

Shares of the publicly traded Builders, already one of the largest materials suppliers in a highly fragmented building products marketplace, spiked by 65% on Monday after the announcement.

The deal, which will diversify Builders’ product line and geographic reach, comes as the housing industry’s continuing recovery is on a slow incline.