Consolidation Accelerates in the Window and Door Industry
Manufacturers of window and door products are seeing an active mergers and acquisitions market as the pace of consolidation continues. Private equity groups are competing against strategic industry buyers to close deals and build market share.
Several large window and door manufacturers have been acquired over the last 18 months. PGT acquired WinDoor in February 2016 for an estimated ’s $102 million acquisition. The deal is expected to strengthen PGT’s position in the impact-resistant window and door market in Florida. WinDoor has grown 20 to 25 percent over the past two years. PGT followed in October 2016 with the acquisition of US Impact Systems for an estimated $2 million, to gain a foothold in the commercial market.
In August 2016, Headwaters acquired Krestmark Industries for approximately $240 million, according to some estimates. This strategic acquisition provides Krestmark an entry to the Texas residential market and will extend Headwaters’ residential exterior building products portfolio.
In November 2016, Boral Industries, an Australian window and door manufacturer, acquired Headwaters to increase its share of the U.S. building and construction markets. The acquisition will double the size of Boral’s U.S. business.
Window and door manufacturer, Jeld-Wen has been highly acquisitive, closing two acquisitions in 2016 and six since 2015 to aggressively grow its door and window product portfolio. Acquisitions include Trend Windows and Doors, Dooria, LaCantina Doors, Karona, and Aneeta Window Systems. Jeld-Wen raised $575 million in an IPO in January 2017, pricing 25 million shares at $23 per share—the high end of the offering range. As a result, the company has lots of capital to continue its aggressive acquisition strategy. Jeld-Wen has been backed by private equity group, Onex Partners since 2011.
Window and door giants, Marvin, Pella and Masonite have also been active industry buyers, each announcing acquisitions in 2016. Marvin acquired Denver-based TruStile Doors LLC in May. This came after Pella Corp acquired Grabill Inc., a manufacturer of custom luxury windows and doors. Masonite also made several acquisitions, including its purchase of Performance Doorset Solutions, a manufacturer of custom doors and millwork in the United Kingdom, and USA Wood Door, a wholesaler and fabricator of architectural and commercial wood doors in the United States.
The window and door industry has seen an increase in private equity interest as the building market recovers. A number of new platform and add-on acquisitions have been announced in 2016 including Ridgemont Equity Partners’ acquisition of Delta Door and Hardware, Paradigm Windows Solutions acquisition by CapitalWorks, the Cascade Windows acquisition by Center Oak Partners, the acquisition of Quantum Windows & Doors by Capital Partners, Inc., and the acquisition of Western Window Systems by Capitala Group. Private equity groups have raised over $150 billion in capital that they need to invest over the next 3 years which is expected to continue to drive activity.
The pace of acquisitions suggests that 2017 and 2018 will be a seller’s market for window and door manufacturers, fueled by surplus investment capital, debt capital and low-interest rates. In addition, limited organic growth opportunities are continuing to drive strategic acquisitions, as buyers look to broaden product portfolios, increase market share and diversify into growing markets.
For additional information about acquisition opportunities in the residential or commercial window and door sector please contact Rich Jackim at (224) 513-5142 or at rjackim@jackimwoods.com.
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