A sure sign of the woodworking industry business promise: equity investors moved into the field.
As we researched the 2014 Wood Industry Almanac, looking for trends from the past year, the term "private equity" popped up repeatedly. Tracing the origins of stories, we found that during the downturn, in the bleakest days for businesses, private equity partners were active in the woodworking industry, keeping large companies afloat.
The capital infusion wasn't enough to assure survival. Cardell Cabinetry continued to operate, but on a gradually deteriorating basis, until finally it closed. But HIG Capital Partners helped it limp along until the recovery.
Others fared better, such as Norcraft Industries, which was able to make it through the parlous times, until its investors could recoup their gamble in a public offering - successful enough, in that it was increased by during the offering period.
And it continues: Sidereal Capital Group and Argosy Private Equity just acquired UC Wood Coatings. And Louisiana Pacific just sold a biofuel business to Tenex Capital, very active in the woodworking industry
Why are they there? Because even at the very bottom, the private equity companies new the cyclical nature of the housing market would eventually bring recovery, and with it, businesses in sectors of furniture, flooring, windows, doors and cabinetry - and the lumber they are made from - would recover.
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