PGT Innovations entered into an agreement to acquire Arizona-based Western Window Systems for $360 million. The transaction, which should wrap up in the third quarter of 2018, will create a combined company that’s expected to generate approximately $706 million to $732 million in net sales.

Following the close of the transaction, Western Window Systems will become a wholly owned subsidiary of PGT Innovations. It will continue to operate and manufacture products as a separate brand within PGT Innovations. PGT Innovations will retain its headquarters in Florida, and the combined company will maintain manufacturing operations in Arizona.

PGT Innovations is buying Western Window Systems from PWP Growth Equity, the middle market private equity group of Perella Weinberg Partners. PGT Innovations will finance the transaction through a combination of cash on hand and $315 million of incremental debt.

“We are excited to add Western Window Systems to the PGT Innovations family of brands,” said Jeff Jackson, president and CEO of PGT Innovations. “This transaction unites two highly complementary businesses to create a national leader in the premium window and door space, with an expanded product portfolio tailored to provide significant benefits for our collective customers. Western Window Systems delivers growth by disrupting industry norms and adopting non-traditional approaches to contemporary windows and doors systems. With a developed footprint across the South and West, we believe the combined company will be well positioned to drive profitable, sustained growth, including opportunities to introduce our respective products to each other’s customer base. We believe this transaction will accelerate our ability to enhance value creation for our shareholders. We welcome Western Window Systems’ talented 330 employees into the PGT Innovations family and look forward to working with them to build on each company’s record of growth and success.”

PGT Innovations expects to achieve annual cost savings beginning in the first quarter of 2019, with approximately $8 million to $12 million realized by the end of 2019.

The company says expanding outside of its home base of Florida is an important component of its strategic roadmap for growth. With the addition of Western Window Systems, PGT Innovations will gain access to growing markets throughout the western United States, including California, Texas, Arizona, Nevada, Colorado, Oregon, Washington and Hawaii. The strategic transaction positions it to focus on high-growth contemporary architectural designs and indoor/outdoor living spaces.

Western Window Systems, which has sales in 40 states, is a leader in contemporary door and window systems designed for unifying indoor/outdoor living spaces. The company is expected to achieve net sales of approximately $126 million to $132 million and a compounded annual growth rate of approximately 22 percent from 2015 through the end of 2018. The company says it ended the first six months of 2018 with a record backlog, and since January 1, 2017, it’s added 186 new dealers.

“PGT Innovations is an organization whose values and culture align with our own,” said Scott Gates, president and CEO of Western Window Systems. He will join PGT Innovations’ executive leadership team as senior vice president of PGT Innovations and president of Western Window Systems, and the other members of Western Window Systems’ leadership are expected to be retained as well. “PGT Innovations’ enviable understanding of, and sales into, the repair and remodel market provides a great opportunity for collaboration to service our customers’ total business needs and the needs of new dealer customers who have a focused presence in that segment. We look forward to working closely with Jeff and the PGT Innovations leadership team to continue our focus on innovation and excellence as part of a more diversified company that we believe will be even stronger. Additionally, we thank PWP Growth Equity for all of their collaboration and support in helping us achieve tremendous growth over the past few years.”

Western Window Systems has recently invested in its manufacturing capacity, automation, and sales and marketing infrastructure, including relocating to a new facility with upgraded engineering and manufacturing capabilities. During the past 12 months, the company has introduced 14 new products focused on energy efficiency and structural performance, including the 7000 Series product line.

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