What’s News Aug/Sept 2018

July 12th, 2021 by Nathan Hobbs

Mergers

Ply Gem, NCI to Merge, Form $2.6 Billion Company

Ply Gem and NCI Building Systems Inc., a manufacturer of exterior building products for commercial construction, will combine in a stock-for-stock merger to create a single company with an equity value of about $2.6 billion.

The company will operate under a new name that hasn’t been determined yet, and both Ply Gem and NCI will preserve their existing brands. The company will be headquartered in Cary, N.C., with a significant presence in Houston.

Under the terms of the agreement, NCI will issue 58.7 million shares to Ply Gem shareholders. When the transaction closes, NCI shareholders will own 53 percent of the company’s common equity, with Ply Gem share-holders owning 47 percent. The trans-action is generally expected to be tax-free to Ply Gem owners for U.S. federal income tax purposes. It’s expected to close in the fourth calendar quarter of 2018, subject to approval by NCI shareholders and customary regulatory approvals

The combined company is expected to generate revenue of approximately $4.5 billion. After three years, it expects cost-reduction initiatives and merger-related synergies to yield more than $150 million in annual cost savings. Standalone cost reduction initiatives are already underway at both NCI and Ply Gem.

NCI, headquartered in Houston, manufactures metal products for the commercial building industry. It has 5,300 employees at 38 manufacturing locations in North America.

Ply Gem manufactures and sells a variety of products for single- and multi-family homes, including doors and windows. The company employs approximately 11,600 people across 35 facilities in North America. Private investment firm Clayton, Dubilier & Rice acquired Ply Gem in April 2018 and concurrently merged it with Atrium Windows & Doors.

DWM columnist Michael Collins, an investment banker and a partner in Building Industry Advisors who specializes in mergers and acquisitions in the door and window industry, said it was a blockbuster deal with big implications for the industry.

“The mega deal is the order of the day in building products right now,” he said. “A lot of highly successful companies are continuing to place large bets on the future success of the building and remodeling industries, and this deal is typical of that trend. There will be the normal process of sorting out customers, territories, products, brands and so on. For now, there is a bigger player in the neighborhood to watch as we head into what should be a very strong next few years.”

PGT Innovations to Buy Western Window Systems

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 trans-action, 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 will finance the transaction through cash 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.

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.

Western Window Systems, which has sales in 40 states, manufactures contemporary door and window systems. It expects net sales of approximately $126 million to $132 million and an 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.

Cooper Standard to Acquire Lauren Manufacturing

Cooper Standard will acquire Lauren Manufacturing and Lauren Plastics. Terms were not disclosed.

According to the company, the acquisition expands the company’s sealing product line in building and construction; containers and enclosures; distribution and aftermarket; as well as in specialized products for the automotive and transportation markets.

Efficiency

GreenON Program Extended to October

Ontario premier Doug Ford, who canceled the Green Ontario (GreenON) window rebate program in June, agreed to extend it until the end of October so customers who recently purchased windows can get their orders filled.

Following his election in May, Ford pulled the province out of a cap-and-trade market that funded the GreenON program.

Originally, homeowners would get cash back if they submitted a rebate application by September 30, 2018 for work to be completed by August 31, 2018. Now, they’ll have until November 30 to submit rebate applications for work to be finished by October 31. Because replacement windows are custom-made, lead times can be anywhere from 15 to 20 weeks. That could have left a lot of customers in the lurch, especially with the crush of homeowners ordering upgrades because of the rebate.

Fenestration Canada issued a statement about the loss of GreenON.

“The abruptness of the cancellation will leave a lot of consumers high and dry,” the association said. “We urge the incoming government to review their position and extend the phase-out period at the very least the end of 2018. This will allow for those already in the queue for products and services to receive them. Windows are not off-the-shelf products, unlike other products available under the GreenOn rebate program. In the window manufacturing and installation industry, production lead times and certified crew scheduling is often much longer than the very short phase-out period that has been allotted.”

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