Soft-Lite President Divulges Further Details Regarding Gorell PurchaseMarch 22nd, 2012 | Category: Industry News
When Soft-Lite announced in February that its subsidiary Soft-Lite-Gorell would purchase the assets of Gorell Windows and Doors, which had been placed into receivership, Soft-Lite’s president Roy Anderson was pretty quiet about the purchase—until now. The company announced further details this week regarding plans for Gorell and on Wednesday Anderson granted an interview with DWM magazine.
DWM: First, I want to go back to the beginning. Were you looking for acquisitions and Gorell came at the right time?
Anderson: They are one of our main competitors that we go head-to-head with and respect in the marketplace. I called Wayne [Gorell] awhile back [late in 2011] and asked him if he had any thoughts regarding selling or merging. He said he had a book out [Offering Memorandum describing the financial performance, product segments, distribution, etc.] and I was late to the party. So we got the book from them and we did look at the company in early January and sent a letter saying we wanted to buy assets. But nothing came of it so we thought it was dead. We were told they would be refinancing with the bank and it wasn’t for sale anymore.
So I was surprised when it was announced that they were placed into receivership. We reached out to the receiver immediately then spent the weekend working with her.
DWM: When you first made the announcement back in February, at that time did you think it may be a possibility to keep both plants running? I know yesterday you said you are closing the plant.
Anderson: When I went there and met the people I tried to find a way to keep the plant open but it just didn’t work out. No one likes to see anyone lose their job–my dad was a blue-collar worker. It’s something I hate. That’s why I took so long from the original letter of intent to the final agreement as we were trying to find a way to keep it open.
DWM: The press release you issued said “it’s not feasible.” Can you elaborate on that?
Anderson: They had an EPA situation from the Season All days from 15 years ago. They have a facility that has to be monitored by the EPA—that’s a liability no one wants to take on. They also had a large unfunded pension liability. We did reach out to the pension fund to see if we could work something out but they never got back to us. When I said I wanted to take on the warranties—that’s a large expense. So if you take on too much you can take on a situation and endanger yourself.
DWM: What Gorell employees are you keeping?
Anderson: We are keeping the sales staff, customer service, IT and some others and the retail outlet will stay open.
DWM: Have you retained most of Gorell’s customers?
Anderson: The receivership really scared a lot of customers, so with the Receiver’s consent I visited a number of them and they are all on board. There are some who have chosen to go a different path but we maintained the large majority and, quite frankly, I am surprised at the number of orders coming in given the press, etc.
A lot of them have been there for 20 years and are loyal to the brand. There are one or two who have left and have indicated to get back with them in 45 days. But we are looking at the orders coming in and they have been very strong.
DWM: I want to clarify something you said in your press releases regarding the warranties. You said that, “Soft-Lite Gorell is committed to honoring Gorell warranty obligations for products made before February 14, 2012, for Gorell customers who meet their obligations to Gorell and remain loyal to the Gorell brand.” So what if a Gorell customer moved to another window manufacturer and a homeowner then submitted a claim? Would that not be covered?
Anderson: No it wouldn’t. Replacement parts will be available, but they will pay for it. As a courtesy we will have replacement parts available free of charge for windows sold through our loyal customers, and that will mean most of the windows, but we are buying these assets free of all Gorell liabilities. So if a Gorell customer has already left or moves to another manufacturer, we have no responsibility for the windows sold before we bought the assets.
DWM: What surprised you, if anything, about this whole situation?
Anderson: I thought the whole deal was over and the next thing I knew they were in receivership. That was a surprise that no one got back to me as I thought they were off the table.
Another thing was the level of debt the company was carrying—it was mind boggling. When you are in the industry you hear rumors. I heard a number and said that’s impossible. When I got that number from the banks it was 50 percent higher than that rumor I had heard.
I’m not surprised by this but I want to say I already like the company and the loyalty of the customers. The people have been there for a very long time. I thought it was impressive that they have been there for so long.