Clayton, Dubilier & Rice (CD&R) has agreed to acquire publicly-traded Ply Gem in a go-private transaction valued at approximately $2.4 billion and has also agreed to acquire, in a separate transaction, Atrium Windows & Doors from Golden Gate Capital. Atrium will be combined with Ply Gem to create an exterior building products company that has total annual revenues of more than $2.4 billion.
Ply Gem (NYSE: PGEM) is a manufacturer of vinyl siding and vinyl and aluminum windows that are used in both new construction and home repair and remodeling. The company’s product line includes windows and patio doors, vinyl and aluminum siding and accessories, designer accents, cellular PVC trim and mouldings, vinyl fencing and railing, stone veneer, roofing and gutterware products. Ply Gem is headquartered in Cary, NC (www.plygem.com).
Similar to Ply Gem, Atrium is a manufacturer of vinyl and aluminum windows and doors that are used in both new construction and home repair and remodeling. The company had $350 million of revenue in 2017. Atrium, led by CEO Ron Cauchi, was founded in 1948 and has three facilities located in Welcome, NC (headquarters); Dallas, TX; and London, ON (www.atrium.com). Golden Gate Capital and Kenner & Company acquired Atrium out of bankruptcy in April 2010.
The combined operations of Ply Gem and Atrium will be headquartered in Cary, NC, and Gary Robinette, currently Chairman and CEO of Ply Gem, will continue as Chairman and CEO. “The strategic and operational excellence of CD&R and Golden Gate will help strengthen the long-term growth of the new company,” said Mr. Robinette. “This support, along with the expanded business and product portfolio of the new combined company, will establish a stronger window platform with manufacturing scale and channel distribution advantages for customers.”
The Ply Gem and Atrium transactions are expected to close simultaneously in the second quarter of 2018. At closing, CD&R will own 70% of the new privately-held company and Atrium shareholders, which includes Golden Gate Capital, will own 30%. “This is a transformational milestone for two highly complementary businesses,” said Nate Sleeper, a Partner at CD&R. “Together, Ply Gem and Atrium have a well-positioned platform across North America, a deep set of capabilities to serve customers, and a strong foundation for long-term growth and value creation.”
CD&R invests in European and US-based businesses. Since founding in 1978, the firm has invested $25 billion in 77 companies across a range of industries with a total transaction value of approximately $100 billion. CD&R was founded in 1978 and is based in New York and London (www.cdr-inc.com).
Golden Gate Capital targets companies across a range of industries and transaction types, including going-privates, corporate divestitures, recapitalizations, and public equity investments. The firm has approximately $15 billion of capital under management and is based in San Francisco (www.goldengatecap.com).
“We are pleased to continue our partnership with Atrium and look forward to working closely with Ply Gem and CD&R,” said Rajeev Amara, a Managing Director of Golden Gate Capital. “We believe strongly in the long-term growth prospects of joining these two great businesses.”
CD&R has obtained committed financing from Bank of America Merrill Lynch; Barclays; Deutsche Bank Securities; GS Bank USA; JP Morgan; Jefferies Finance; Mitsubishi UFJ Financial Group (MUFG); Natixis; RBC Capital Markets; Societe Generale; and UBS Investment Bank.
© 2018 Private Equity Professional | February 1, 2018
