What’s News September 2021

September 7th, 2021 by Nathan Hobbs

M&A

Building Industry Partners Forms New Southeast LBM Interests, Picks Up Warner Robins

In one of the industry’s latest mashups, officials for private equity firm Building Industry Partners LLC (BIP) announced the formation of a regional lumber and building materials pro dealer organization. Dubbed Southeast LBM Interests, the new organization results from a partnership with industry veteran Roger Farmer and the acquisition of assets from the Warner Robins family of businesses, including Warner Robins Building Supply Co., Henson Building Materials and Mountain Building Supply (collectively referred to as Warner Robins Supply). In a press release issued by BIP, officials said the Warner Robins family of companies was introduced to BIP by [DWM] blogger and columnist Mike Collins and his partner, Walt Kurek, at Building Industry Advisors, an investment firm that focuses on building products.

Farmer joined the new organization as its president and will lead the company’s growth efforts across Georgia, North Carolina, South Carolina and beyond, officials said. For the past 25 years, he has led lumber and building material businesses throughout the U.S., most recently serving as executive vice president of Swift Supply.

BIP operating partner Nick Massengill will be part of the team supporting the new organization. Massengill previously served as president of Robert Bowden Inc., transitioning the organization to employee ownership in 2001 and eventually leading to its sale to BMC in 2015.

Warner Robins Supply is an independent, lumber and building materials pro dealer with eight locations. The company serves Warner Robins, Ga., and seven rural markets throughout Georgia, North Carolina, and South Carolina, officials said, generating more than $80 million in annual sales.

The transaction addressed the Bayer family’s needs for succession, officials for the new organization said. Following the transaction, Mark Bayer will remain as an advisor to Southeast LBM and as chairperson of Warner Robins Supply. Farmer will serve as president of the Southeast platform, succeeding Bayer as president of Warner Robins Supply. Both businesses will retain their existing names.

Builders FirstSource to Acquire WTS Paradigm

Builders FirstSource Inc. (BFS) is set to acquire WTS Paradigm LLC, a software solutions and services provider for the building products industry. BFS officials said the acquisition marks a “significant step forward” in a strategy to invest in digital solutions that will help customers build more efficiently. Paradigm, which serves manufacturers, retailers, dealers, home builders and remodelers, is expected to generate revenue of approximately $50 million in 2021, according to a BFS press release. Based in Middleton, Wis., the company offers software for configuring, estimating and manufacturing products, including doors and windows.

“Home construction lags far behind other major industries in the adoption of modern tools that can save time and money and reduce waste,” said BFS president and CEO Dave Flitman. “Paradigm’s powerful technology platform provides us with an enhanced customer value proposition, helping fuel long-term growth by establishing a leadership position in digital solutions for homebuilders.”

The transaction is expected to close in 2021, after which Paradigm will operate as an independent subsidiary. The cash transaction is valued at approximately $450 million.

Westlake Acquires Boral’s NA Building Products

Westlake Chemical Corp. announced a deal with Boral Industries Inc., a wholly owned subsidiary of Boral Limited, to acquire Boral’s North American building products businesses, including roofing, siding, trim, shutters, decorative stone and windows. The all-cash transaction is proposed at $2.15 billion and has been unanimously approved by the boards of directors of both companies, expecting to close in the second half of 2021.

Blue Wolf Capital to Sell Novo Building Products

Blue Wolf Capital Partners, a New York-based private equity firm, has reached an agreement to sell Novo Building Products LLC to Hardwoods Distribution Inc., a North American distributor of architectural-grade building products.

Headquartered in Zeeland, Mich., Novo is a manufacturer and distributor of mouldings, millwork, stair parts and other specialty building products to national home retail centers and building material dealers.

Saint-Gobain Acquires Vi-Lux

Saint-Gobain, through its building products subsidiary CertainTeed LLC, acquired Vi-Lux Building Products, a Canada-based manufacturer of cellular polyvinyl chloride (PVC) molding and trim.

Based in Napanee, Ontario, Vi-Lux serves the residential and light commercial markets with luxury exterior and interior millwork, along with components and custom profiles for the door and window industry. The company’s 49 employees will transition to Saint-Gobain.

Window Nation Acquired by AEA Investors

Officials for AEA Investors’ middle market private equity team announced the acquisition of Window Nation Holding, a Fulton, Md.-based door and window dealer. AEA, a firm that acts as a “private investment vehicle for a select group of industrial family offices,” manages funds that have more than $15 billion of capital, including the leveraged buyouts of middle market companies.

Founded in 2006 by brothers Harley Magden and Aaron Magden, Window Nation is a direct-to-consumer dealer for residential repair and replacement in 15 markets across the Northeast, Mid-Atlantic and Midwest regions of the U.S.

The Marwin Company Acquires Millwork 360

Validor Capital, a private investment firm, announced that its portfolio company, The Marwin Company, acquired Millwork 360, a Tampa, Fla.- based manufacturer of doors and custom mouldings for residential and commercial projects. Millwork 360 is associated with Mastergrain Fiberglass Door Systems and exclusively distributes for the state of Florida.

Officials say the combination of the two companies creates a more robust product offering, while enhancing manufacturing and distribution capabilities.

“We are very excited to have Mike Williams and his team become part of The Marwin Company. Millwork 360 has a great line of high-end door and moulding products that we believe our customers will greatly value,” says Andy Davis, CEO of The Marwin Company.

H.I.G. Capital Sells Weru Group to Dovista A/S

Global alternative investment firm H.I.G. Capital announced that one of its affiliates signed an agreement to sell its German portfolio company Weru Group to Dovista A/S (DAS), a North European provider of vertical windows and exterior doors.

H.I.G. acquired Weru, a German manufacturer of PVC doors and windows, in 2014, subsequently acquiring Unilux, a manufacturer of wood-based doors and windows. During H.I.G.’s ownership, Weru modernized its production facilities, launched new products, and implemented various digital innovations, officials report.

“Our two companies make a great fit,” said Allan Lindhard Jørgensen, DAS CEO and president. “With the acquisition of Weru, we accelerate our plans to expand further and truly make all of Europe our home market. We add a notable German vertical windows and exterior doors brand to our existing brand portfolio and gain further traction in Germany which is a significant market for building a strong presence in Central Europe.”

Wynnchurch Capital Acquires Trimlite

Wynnchurch Capital L.P. acquired Trimlite Mfg Inc., a manufacturer and distributor of residential doors and related door products.

“Over the years we have developed a strong reputation in the market for providing our customers with exceptional service, quick lead times and a broad offering of quality door products. Wynnchurch shares our commitment to putting the customers first and we are excited to partner with them as we pursue our next phase of growth,” said Patrick Hooper, CEO of Trimlite.

Founded in 1982 and headquartered in Renton, Wash., Trimlite operates in the U.S. and Canada providing products and value-added services to a network of wholesale distributors, dealers, local door retailers, and OEM customers.

“Since its founding, Trimlite’s commitment to customer service has allowed the company to successfully broaden its product offering and expand into new geographies. We are excited to partner with Patrick and the entire Trimlite management team to continue  growing the business,” said Brian Crumbaugh, partner at Wynnchurch.

Officials for Wynnchurch say the firm is actively seeking investment opportunities for its $2.3 billion fund.

Cardinal Glass Closes AGC Acquisition

Cardinal Glass Industries announced on August 2 that it finalized a transaction to acquire the assets of AGC Glass in Churchill, Tenn.; Abingdon, Va.; and Spring Hill, Kan. Plans of the acquisition were first reported in June. The value of the transaction was confirmed by Bowie Neumayer, vice president of sales and marketing at Cardinal Glass Industries, at $450 million.

The transaction is expected to generate a profit of approximately $227 million, which is expected to be recorded as other income in the consolidated financial results for the third quarter of the fiscal year ending December 31.

*The financial information was converted from Japanese Yen to U.S. dollars on June 15, 2021.

Expansions

Briefly:

Feldco Windows, Siding and Doors opened a new location, in Wausau, Wis. While the company has operated in Wausau since 2017, a dedicated showroom is now complete with management and staff in place. The addition marks the company’s eleventh showroom, serving ten markets across Illinois, Iowa and Wisconsin.

Wincore Windows and Doors opened a new 67,000-square-foot manufacturing facility in Mineral Wells, W.Va., less than eight miles from the company’s headquarters and other production facilities in Parkersburg. The new facility will manufacture fiberglass entry door systems, including impact-resistant configurations.

MJB Wood Group, a manufacturer and distributor of industrial wood products, broke ground on a new 500,000-square-foot facility on 37 acres near Bristol, Ind. The new facility will replace an older 228,000-square-foot building and is expected to open in the first quarter of 2022, employing 100 people.

Masonite International Corp. announced plans for a new door manufacturing facility in Fort Mill, S.C. Officials said the new 370,000-square-foot facility will produce doors for the North American residential housing market and is expected to employ more than 220 people, beginning in early 2022.

Roto North America acquired an additional 18,000 square feet for a warehouse in Connecticut. Officials say the facility is part of Roto Frank of America Inc.

Kval Inc., a manufacturer of door machinery, announced a partnership with Titan Development to design and build a 52,500-square-foot facility in Hutto, Texas. The new facility will house a full production staff and on-site machining operations, as well as a secondary parts inventory warehouse

Harry G. Barr Company of Fort Smith, Ark., announced a three-stage, $10 million expansion for its office and manufacturing space. The first phase is expected to begin later this year, including a parking lot and entrance/exit. Phases two and three will include office space, a new breakroom, additional space for production capacity, an 18,000-square-foot room for outbound distribution and 50,000 square feet for raw material storage.

Woodgrain Expands Operations, Acquires Door Shop

Woodgrain is expanding operations into Georgia, while also acquiring Lowe’s Millwork, a door shop in White House, Tenn. As the largest industrial employer in Lee County, Ga., the company plans to invest $10 million in expanding its Woodgrain Millwork manufacturing operations, creating 150 additional jobs in southwest Georgia, officials said.

The company is also set to grow its current facility in Leesburg, Ga., by 156,000 square feet, with expanded operations expected to begin by the third quarter of 2022.

With the acquisition, Woodgrain will supply Lowe’s home improvement stores with ReliaBilt interior and Therma-Tru Benchmark exterior doors across the Southeast and Mid Atlantic.

Restructuring

Rehau Group Undergoes Restructuring

The Rehau Group is restructuring to establish Rehau Automotive and Rehau Industries as separate companies. The new structure will divide the company currently known as Rehau AG + Co., together with Raumedic and Meraxis, as well as the recently founded innovation unit Rehau New Ventures. Amid the restructuring, effective July 1, Jobst Wagner handed over the office of president to his brother, Dr. Veit Wagner, with Jobst now assuming his brother’s past role as vice president. Rehau Industries will continue to be led by CEO William Christensen.

“As a modern family business, we rely on change to lead the group into a sustainably successful future,” said Veit Wagner. “In particular, we want to make our divisions even more targeted and powerful.”

The new company, Rehau Industries, will form the common umbrella for the other divisions of Rehau, including building solutions, window solutions, furniture solutions and industrial. It will also house the cross-divisional services units.

The transition to the new structure is expected to be completed in the first half of 2022.

Environmental

ProVia’s Solar Array Among the Largest in Ohio

A new 1.792 megawatt solar array installed by ProVia at the company’s Cherry Ridge manufacturing facility was deemed to be among the largest privately-owned installations in Ohio. Company officials say the 4,480 solar panel system is projected to reduce electrical power consumption at the facility by 60% annually.

The door and window manufacturer partnered with Paradise Energy Solutions to construct the array, which the company says prevents emission of 1,472 tons of CO2 annually.

“As we investigated this project, we determined that we could successfully balance a socially responsible choice with economic feasibility, which made solar an excellent solution,” said Larry Troyer, CFO for ProVia. “This is a long-term investment that’s good for our company and good for the environment.”

Legal

Jeld-Wen Fires Back at Insurance Providers

After crafting a deal for $40 million to settle a class action suit with investors, door and window manufacturer Jeld-Wen Inc. entered a dispute with insurance providers Travelers Casualty and Surety Company of America (Travelers) and Old Republic Insurance Company, alleging that at least one of them is obligated to issue pay outs for excess liability insurance
policies.

In April 2021, Travelers filed a complaint against Jeld-Wen and 14 individuals (including Jeld-Wen executives and other representatives) demanding a jury trial, alleging that there is no coverage available to Jeld-Wen under an excess executive and organization liability insurance policy for a securities class action, a stockholder derivative action and three books and records demands. Before Jeld-Wen’s excess policy incepted, three federal antitrust lawsuits were brought against the company, “each of them alleging violations of federal antitrust laws,” the complaint says.

Jeld-Wen fired back by filing counter claims against Travelers and a third-party complaint against Old Republic Insurance Company. In its counterclaims against the insurance providers, Jeld-Wen seeks $10 million, “as a result of Travelers’ breach of its directors and officers excess liability insurance policy issued to Jeld-Wen for the 2019-20 policy period.” Should
the court determine that Travelers doesn’t owe coverage, Jeld-Wen alternatively seeks a judgment against Old Republic, “as a result of Old Republic’s breach of its directors and officers excess liability insurance policy issued to Jeld-Wen for the 2018-19 policy period,” court documents state.

According to court documents, in 2021 Jeld-Wen agreed to settle a securities action “with the consent of its insurers.” In the interests of its directors and officers, Jeld-Wen agreed to provisionally fund a portion of the settlement, officials say.

Former Pella Employee Sues Over Biometric Data As some door and window companies require temperature checks amid the COVID-19 pandemic, one employee now alleges that the practice led to unlawful storage of biometric data.

Brooks Olds was employed by Pella Corp. at its Macomb, Ill., location from November 11, 2019, to December 15, 2020. In a putative class action filed March 3, involving more than 500 employees, Olds alleges that Pella required his temperature to be taken before the start of each workday “by a device that functioned, in part, by scanning” his facial geometry. His biometrics were stored in a database, court documents say, and he was never informed of how long the company would store or “the specific limited purposes” for the data. Olds was also never informed of when his biometric data would be deleted from Pella’s database, the case alleges.

The suit further alleges that Olds “has continuously and repeatedly been exposed to the risks and harmful conditions” created by Pella’s violations of the Biometric Information Privacy Act (BIPA), enacted by Illinois in 2008, including not obtaining “employees’ executed written release as a condition of employment.”

Olds seeks $5,000 “in statutory damages for each of three separate claims under BIPA.”

“Even assuming each putative class member can recover only $5,000 for each claim, the total amount in controversy exceeds $5,000,000,” court documents state.

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