CARY, N.C., DALLAS, NEW YORK — Private equity firm Clayton, Dubilier & Rice has agreed to purchase both Ply Gem Holdings Inc. and Atrium Windows & Doors in deals totaling more than $2 billion. CD&R said it will merge Ply Gem with Atrium Windows & Doors, creating a single exterior building products company under the Ply Gem name.
The independent transactions are expected to close simultaneously in the second quarter of 2018, subject to customary closing conditions, including regulatory approvals. On Feb. 1, former Attorney General of Louisiana Charles C. Foti, Jr., Esq. and the law firm of Kahn Swick & Foti, LLC published a notice that they are investigating the Ply Gem sale to "determine whether this consideration and the process that led to it are adequate, or whether the consideration undervalues the company."
In the deal announced Jan. 31, CD&R said it will acquire all of the outstanding shares of Ply Gem (NYSE:PGEM) common stock in a go-private transaction of approximately $2.4 billion. Majority stockholders building products manufacturer approved the agreement, which gave Ply Gem shareholders $21.64 per share in cash — a premium of approximately 20 percent over Ply Gem’s closing stock price on January 30.
Also on Jan. 31, CD&R announced it had entered into a definitive agreement with private equity firm Golden Gate Capital to acquire Atrium Windows & Doors. Terms of the transaction were not disclosed.
Combined revenues for Ply Gem and Atrium Windows totaled more than $2.4 billion in 2017.
The new Ply Gem will continue to be headquartered in Cary, North Carolina, and current Ply Gem Chairman and CEO Gary E. Robinette will continue in the role. John Krenicki, a CD&R operating partner and former vice chairman of General Electric Co., will become Lead Director of the Board.
“The Ply Gem Board’s unanimous approval of this transaction is based on the conviction that it delivers superior value to shareholders,” Robinette said. “The strategic and operational excellence of CD&R and Golden Gate will help strengthen the long-term growth of the company. 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. Together with the talented Atrium team, we look forward to providing exceptional value and service to all of our customers and rewarding career opportunities for our associates.”
“We are excited to combine with Ply Gem and look forward to the synergies that will be achieved through an enhanced product breadth and stronger North American platform, which will allow us to drive topline growth and customer value,” said Ron Cauchi, Atrium CEO.
Based in Dallas, Texas, Atrium is a provider of high-quality windows and doors, sold throughout the United States and Canada. The company operates a nationwide network of manufacturing facilities and sells products to the new construction and repair and remodel markets. Atrium generated approximately $350 million of revenue in 2017.
Headquartered in Cary, North Carolina, Ply Gem is a leading manufacturer of building products in North America. The company produces a comprehensive product line of windows and doors, siding, trim, mouldings, accessories and other building products for new construction and home repair and remodeling. Ply Gem is reportedly the top U.S. provider of vinyl and aluminum windows and number one provider of vinyl siding in North America. Although final figures for 2017 are not listed on its site, third quarter net sales for the company were $564.7 million, and Ply Gem posted 2016 net sales in excess of $1.9 billion.
“This is a transformational milestone for two highly complementary businesses,” said Nate Sleeper, 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.”
According to the statement, CD&R funds will own approximately 70 percent of the new privately-held company, and Atrium shareholders, which include funds managed by Golden Gate Capital, will hold approximately 30 percent. Golden Gate Capital acquired Atrium in 2010.
“We are pleased to continue our partnership with Atrium and look forward to working closely with Ply Gem and CD&R,” said Rajeev Amara, managing director of Golden Gate Capital. “We believe strongly in the long-term growth prospects of joining these two great businesses.”
Watch a YouTube video of Atrium Windows & Doors' manufacturing process (below):
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