Masco sells cabinetry division to ACPI for $1 billion
LIVONIA, Mich. - Masco has entered into an agreement to sell its cabinetry division - which includes the KraftMaid, Merillat, QualityCabinets, and Cardell Cabinetry brands - to ACProducts Inc. (acpi) for $1 billion. ACPI, whose four divisions include the wholly-owned subsidiary Master WoodCraft Cabinetry, Smart Cabinetry, Cabinets 2000, and acpi, which markets under the Advanta Cabinets, Echelon Cabinetry and Serenade Cabinetry brands, is owned by American Industrial Partners (AIP).
ACPI will provide $850 million in cash at closing and preferred stock issued by a holding company of the buyer with a liquidation preference of $150 million, according to a news release. The preferred stock will have a coupon of 8 percent, increasing to 10 percent in the third year.
"Masco Cabinetry is the logical choice to help us further execute acpi’s brand promise: high-quality cabinetry at a great value, and peace of mind for our customers. We are excited about the opportunities that will come to our customers and the market as a result of this acquisition," said Larry Denbrock, acpi president and CEO.
The agreement contains customary representations, warranties, and covenants. The closing of the sale is expected to occur during the first quarter of 2020, subject to customary closing conditions and regulatory review. Masco says the cabinetry division will be accounted for as discontinued operations for the fourth quarter.
Masco's stock surged nearly 2 percent after the announcement.

After revealing its intent to sell both its cabinetry and windows divisions in June, Masco sold its Milgard Windows and Doors unit to MI Windows and Doors early October for $725 million. Milgard is one of the nation's biggest window makers - employing 3,000 across manufacturing and service plants in Portland, Oregon; Sacramento, Simi Valley and Temecula, California; Denver, Colorado; and Dallas/Fort Worth, Texas. MI Windows and Doors is one of the nation's largest suppliers of vinyl and aluminum windows and patio doors.

Masco said its decision to sell resulted from wanting to minimize its exposure to the new construction market. The company hopes to zero in on its "less cyclical" plumbing and decorative architectural products businesses.

For 2018, Masco reported net sales of its Cabinetry Products segment of $950 million, and operating profit of $86 million. The company is the third biggest cabinetmaker on the FDMC 300. Its windows and cabinetry divisions totaled $1.7 billion in revenue for the year.

In July, Masco reported a 6 percent decrease in net sales for its Cabinetry products in the second quarter, due to lower volume, partially offset by pricing. For the six months (ending June 30) cabinetry sales were at $488 million, up 1 percent compared to the same period a year ago.

Masco is ranked #3 among top North American cabinetry producers, and #15 overall, among the FDMC 300 list of top North American wood products producers. Headquartered in Ann Arbor, Michigan, Masco Cabinetry manufactures and sells semi-custom, stock and value-priced assembled cabinetry for kitchen, bath, storage, home office and home entertainment applications in a range of styles and price points. Masco Cabinetry’s KraftMaid and Cardell products are sold primarily to dealers and home center retailers, and its Merillat and Quality Cabinets products are sold primarily to dealers and homebuilders for both home improvement and new home construction.
In addition to ACPI, AIP's portfolio includes flooring manufacturer AHFP, which markets under the brand names of Armstrong, Bruce, Capella, Homerwood, Robbins, and T. Morton.



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About the author
Robert Dalheim

Robert Dalheim is an editor at the Woodworking Network. Along with publishing online news articles, he writes feature stories for the FDMC print publication. He can be reached at [email protected].