Fenestration Companies See an Open Door to M&A
February 27 2018
- Transaction activity reflects a continued push to broaden footprint and expand product and service offerings, while international buyers are exhibiting strong interest in U.S. assets to tap faster growth. Acquisition multiples continue to remain healthy for high-performing businesses.
- JELD-WEN, Pella, and Masonite were among the active corporate buyers, along with private equity-backed platforms that included Paradigm Window Solutions (CapitalWorks and Ironwood Capital) and Harvey Industries (Dune Points Capital).
- BGL advised Chelsea Building Products, a portfolio company of Graham Partners, in its sale to aluplast GmbH, a Germany-based manufacturer of vinyl window and patio door lineal systems. The transformative acquisition expands aluplast’s U.S. presence and will provide a foundation for accelerated growth in North America.
2018 is off to a robust start, headlined by the proposed acquisition of Ply Gem Holdings by Clayton, Dubilier & Rice (CD&R) in a $2.3 billion take-private transaction, announced in January. Concurrent with the acquisition, CD&R agreed to acquire Atrium Windows and Doors, stating plans to merge the two companies to create a powerhouse in the North American building products market with more than $2.4 billion in revenue. Ply Gem is valued at a multiple of 10.5x EBITDA, indicative of value assigned to growth platforms in today’s market.
We expect M&A activity to increase in 2018, with corporate and private equity buyers maintaining an aggressive posture. Corporates are looking to leverage their buying power and synergies in search of accretive acquisitions to boost topline growth. Private equity funds will continue to be motivated by a sense of urgency to deploy capital, with acquisitive growth central to their investment thesis.