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Outdoor structural connectors
u.s. small-cap equities

Simpson

Manufacturing

company name
Simpson Manufacturing Company
core business
Construction material designer & manufacturer
established
1956
headquarters
Pleasanton, United States
esg consideration
Sustainable timber construction
Environmental

Company Overview

Simpson Manufacturing is the leading designer and manufacturer of structural connectors in the construction industry, providing structural connectors for single and multi-family home construction or remodelling, decking, commercial construction, etc. The company has a 75%-plus market share in wood-to-wood connectors in North America currently, and its “Strong-Tie” brand is synonymous with the company, having the same type of brand recognition that Kleenex does with facial tissue.
75%-plus
market share in wood-to-wood connectors in North America

ESG Consideration

One new market we believe Simpson can help create involves cross-laminated timber (CLT) or mass timber structures, which are constructed out of large structural wooden panels and beams glued together under significant pressure in alternating layers. The product has some significant benefits over traditional steel and concrete buildings, and while more research still needs to be done, there are numerous studies that suggest the adoption of mass timber construction can dramatically reduce the overall carbon footprint of the building industry.
A person working on blueprints
Due to the modular nature of the construction process, cross-laminated timber (CLT) has some significant benefits over traditional steel and concrete buildings, and many are hopeful that it will play a significant role in our effort to fight climate change. 
Since mass timber is less energy intensive than current building methods, which use steel or cement, the total energy required and the carbon footprint of harvesting, production, and constructing is lowered. Additionally, the overall carbon reduction that results from the sustainable replanting of this renewable resource provides an interesting benefit.
Final thoughts
We believe Simpson is positioned as a great benefactor in this innovative industry. Simpson’s role in helping to advance the sustainable, renewable, and environmentally friendly type of mass timber construction has the potential to not only benefit the environment, but also enrich shareholder value over time. A true win-win.
Sources: “Carbon Implications of Construction Materials Selection,” Presentation by Jim Bowyer, Dovetail Partners, Inc. Minneapolis, MN, Burgundy research, Simpson Manufacturing filings
About the author
Steve Boutin
About the author
Steve Boutin, CFA
senior Vice President, Portfolio Manager
After reading The Canadian Establishment by Peter C. Newman, Steve became interested in equity markets and bought his first stock when he was 15 years old. Since that time, Steve has developed a passion in Canadian and U.S. small-cap investing, where he has spent most of his career. At Van Berkom & Associates Inc., he was a partner and played a key role in building the U.S. small-cap division from an incubator project to a successful business venture. Steve has an entrepreneurial spirit and before joining Burgundy, he founded Tonus Capital, a money management boutique specializing in focused investing. Steve still reads extensively about business and has the same thirst for learning about companies and potential investments as he had more than 30 years ago when he bought his first shares.
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