KPS Carves Out Oldcastle Glass
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KPS Carves Out Oldcastle Glass

In FY 2020, Oldcastle had an adjusted EBITDA of $337 million which yields an enterprise valuation multiple of 10.2x

Oldcastle's products include architectural glass, skylights, blast and hurricane resistant windows, barriers and shields, and security glazing systems

SOURCE: Getty Images

KPS Capital Partners has agreed to acquire Oldcastle BuildingEnvelope, a manufacturer and distributor of architectural hardware, glass and glazing systems, from CRH for $3.45 billion in cash.

Oldcastle BuildingEnvelope (OBE) is a manufacturer, fabricator, and distributor of window and framing products used in residential and commercial construction. The company’s products include architectural glass, skylights, blast and hurricane resistant windows, barriers and shields, and security glazing systems that are used in projects ranging from storefronts and building entrances to shower enclosures and skylights.

In addition to its glass products, OBE also distributes branded hardware and glazing supplies through its subsidiary C.R. Laurence. Dallas-headquartered OBE, led by President Liz Haggerty, employs over 6,700 employees across 84 manufacturing and distribution facilities in five countries.

In FY 2020, OBE had an adjusted EBITDA of $337 million which yields an enterprise valuation multiple of 10.2x.

“KPS’ experience with manufacturing businesses and the significant capital resources available will allow us to invest in our commercial and operational growth strategy,” said Ms. Haggerty. “We intend to expand our capabilities as a customer-oriented solutions provider in architectural hardware, glass and glazing markets. We are excited about OBE’s future opportunities, and we have found a great partner in KPS to capture them.”

“We are thrilled to acquire North America’s largest provider of architectural hardware, glass and glazing systems,” said Raquel Palmer, a co-managing partner of KPS. “We intend to drive profitable growth by providing the company with the financial resources to invest in commercial and operational excellence. We will leverage KPS’ decades of manufacturing expertise to create an entrepreneurial culture centered on innovation, continuous improvement and excellent customer experience.”

CRH (Cement Roadstone Holdings) was formed through the 1970 merger of Cement Limited (founded in 1936) and Roadstone Limited (founded in 1949). Today, the company is one of the largest distributors of building materials in North America and Europe with revenues in 2021 of €31 billion. The company’s products include cement, aggregates, concrete, precast concrete products, glass and glazing systems, and fencing. CRH is headquartered in Dublin, Ireland and has more than 77,000 employees at 3,100 locations in 29 countries.

KPS makes control investments in manufacturing and industrial companies across a range of industries, including basic materials, branded consumer, healthcare, automotive parts, capital equipment, and general manufacturing. Many of KPS’s investments involve creating new companies to buy underperforming or distressed assets, companies operating in bankruptcy or in default of obligations to creditors, or with a history of recurring operating losses.

In October 2019, KPS closed both KPS Special Situations Fund V LP at $6 billion in committed capital and KPS Special Situations Mid-Cap Fund LP at $1 billion in committed capital. Both funds were raised in just four weeks and closed above their initial targets. KPS is headquartered in New York City with additional offices in Frankfurt and Amsterdam.

BofA Securities and J.P. Morgan are the financial advisors to CRH.

The buy of OBE by KPS is expected to close by the end of July 2022.

© 2022 Private Equity Professional | March 10, 2022

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