Loewen CEO Offers Further Details Regarding Sale; Says New Ownership Will Allow It to Operate with Current Brand StrategyJuly 6th, 2010 | Category: Industry News
Last week, Canadian-based Loewen announced that it had been acquired by VKR Holding of Denmark (CLICK HERE for that story). Today, Loewen chief executive officer Al Babiuk provided an exclusive interview about the sale to DWM magazine.
DWM: When did you first know you wanted to sell?
Babiuk: The shareholders’ thinking evolved over time to look at options, but it was in the last number of months when the group decided to entertain a look at a transition and we knew it had to be to the right company.
DWM: What made VKR stand out as a potential buyer as opposed to others?
Babiuk: The fact that they are in the window and door industry overall in Europe is a good synergistic fit. They are just now moving further into North America [they are the parent company of Velux], and less than a year ago they purchased Gienow in Canada—none of those brands were competitive with Loewen. We had the opportunity to be at the forefront for VKR to grow in the North American market—that puts us in a good position. The goal was not to seek a buyer arrangement in which Loewen would have to be integrated with other brands. This acquisition allows us to continue to operate the company using our current brand strategy and stand alone model. These were all considerations for our shareholders, and VKR brings substantial resources to help us do that.
DWM: How difficult was it for the Loewens to sell as this is a family business?
Babiuk: It was definitely a difficult decision for the family in one sense. Loewen is a fourth-generation-owned company and the group has evolved, etc. The family obviously wanted the company that bears its name to succeed. But there were different generations and different interests involved and that was definitely a factor. They gave this a lot of consideration and they wouldn’t entertain a sale without all these facts coming together.
DWM: Will there be any focuses on expansion? If so, in what markets?
Babiuk: Our core focus isn’t going to change fundamentally. Even with conditions being challenged, the U.S. market still provides great potential in the higher-end market over the long term. Canada is still a good market, but not as large as the U.S. market. So while it may not have the overall growth potential, we will still develop the Canadian market—that won’t change. That’s one of the reasons we looked at VKR—to help support us with our development of new products and markets.
DWM: Is there anything else you would like to share with the industry about the acquisition?
Babiuk: VKR brings us a lot of opportunity to share ideas, etc., while offering capital to help grow the business. Overall we see it as great opportunity while still maintaining the key elements of Loewen.