Volume 7 Issue 3 March 2006
MERGERS AND ACQUISITIONS
Simonton Acquired by Fortune Brands Inc.
SBR Inc. of Parkersburg, W.Va., and Fortune Brands Inc., headquartered in Deerfield, Ill., have announced a definitive agreement for Fortune Brands to acquire SBR through a tax-free merger. The acquisition includes the home products brands of SBR, including Simonton Windows®, SimEx™, Fypon®, Hy-Lite® Products and Dixie-Pacific™.
According to a news release from SBR, operations will continue as they have in the past at the SBR home products subsidiaries, with no planned employee cutbacks or facility closings as part of the merger. Fortune Brands intends for SBR and each of its subsidiaries to continue running independently, with support from its $4 billion Home and Hardware business that includes Therma-Tru, Moen, MasterBrand Cabinets, Master Lock and Waterloo.
“For more than three decades the people of SBR have worked extremely hard to grow our company and have achieved outstanding results,” said Sam Ross, chairperson and chief executive officer of SBR. “Now Fortune Brands will take us to the next level of success and offer our people even greater growth potential.”
Ross continued, “When considering the sale of SBR, our principal shareholders sought out a company that focuses on creating shareholder value, treats people in an equitable manner and would not have any internal competition with our subsidiaries. We found all these admirable qualities in Fortune Brands. As a result, most of the principal SBR shareholders have indicated a desire to become shareholders in Fortune Brands. We believe this should be a seamless merger that helps strengthen the future for our subsidiaries and our 4,600 employees.”
According to information from SBR, Ross will retire from the company to start a new private investor group that will operate Woodcraft and Dovetail Media, while pursuing other business and personal interests. Greg Schorr will remain as president of SBR, and will continue to be responsible for the operations of Simonton Windows, SimEx, Fypon, Hy-Lite and Dixie-Pacific.
Graco Finalizes Merger with Liquid Control Corp.
Graco Inc., a manufacturer of equipment to move, measure, control, dispense and spray fluid materials, based in Minneapolis, has announced that it is combining its sealants and adhesives business unit with that of Liquid Control Corp.
Graco acquired Liquid Control, a designer and manufacturer of resin dispensing equipment, in January 2005. Throughout 2005, Liquid Control operated independently from the Graco Sealant and Adhesive Equipment business unit. On January 1, 2006, these operating units were combined in North America to form a single Graco I Liquid Control organization. The business unit will be based in North Canton, Ohio.
“Leveraging the unique strengths of both organizations will allow us to better drive product innovation, improve customer service and increase the value we bring to our customers and channel partners,” said Dave Stascavage, director of sales and marketing for Graco.
Super Spacer® Helps Secure United Kingdom’s First ‘A’ Rated Windows
According to Edgetech I.G. Inc., headquartered in Cambridge, Ohio, its customer, Tradelink, has achieved a prestigious ‘A’ rating in the British Fenestration Rating Council Window Energy Rating system. The award makes it the only standard commercially available double-glazed window to achieve this rating, according to Edgetech.
The first UK company to achieve an A rating, in November 2005, did so by incorporating gas-filled, Super Spacer triple-glazed IG units.
“Anyone who has the foresight to take seriously the option for improving thermal ratings will have a head start on future environmental compliance—and a foothold in a new and important market. We’re especially delighted to have achieved this A rating,” said Jim Moody, managing director of Tradelink. “Although we’re the second company in the UK to achieve it, Tradelink’s window is the first commercially available, being the only double-glazed product. When we launched Heatguard, our range of insulated glazed units, the intention was always to offer a product with unrivalled performance. This latest next generation A rated window will complement the C rated window we already offer as standard and the B for installers who are already differentiating themselves.”
In addition, Larry Johnson, executive vice president of Edgetech, has announced that the Kragenbring Group LLC of Hastings, Minn., has been named as the company’s manufacturer’s representative for Minnesota, Iowa and Wisconsin.
The Kragenbring Group represents suppliers of fenestration components to door and window manufacturers in the upper Midwest. Founded by industry veteran Kyle Kragenbring, the fundamental operations of the company include project management, customer service, design assistance and prototype formulation and testing.
PPG Glass Segment Posts $1 Million Fourth Quarter Loss
PPG Industries has reported that for the fourth quarter of 2005 its glass business posted an operating loss of $1 million, down $29 million due to the impact of inflation, including $28 million in higher energy costs, and lower other income.
The company reported that glass sales for the quarter increased $24 million, or 5 percent, due to higher volumes across most businesses and higher selling prices, which were partially offset by the impact of weakening foreign currencies. These decreases were partially offset by improved volumes and selling prices, as well as lower manufacturing and overhead costs.
“The operating loss is largely due to high energy costs, particularly natural gas,” said Jeff Worden, PPG’s manager of public relations. According to Worden there have been only two other times the company’s glass segment reported a loss.
Company-wide, fourth quarter net income was $113 million on sales of $2.51 billion. In the fourth quarter of 2004, PPG reported net income of $183 million on sales of $2.41 billion.
For all of 2005, the company recorded net income of $596 million on sales of $10.2 billion. In 2004, the company recorded net income of $683 million and sales of $9.51 billion.
Crystal Extrusion’s Powder Coat Line Now Operational
Crystal Extrusion Systems of Union, Mo., a subsidiary of Crystal Window and Door Systems, has announced that its new $1.4 million aluminum extrusion powder-coat finishing system is now in full operation. This achievement represents what the extruder says is a full and complete recovery from a factory fire in late 2004, which destroyed the company’s paint finishing line.
The new powder-coat finishing line involved more than 1,600 linear feet of conveyor system and occupies nearly 40,000 square feet of factory floor space. The system uses equipment from several major manufacturers to combine the pre-treatment and powder coat paint operations into one single conveyer integrated system.
The Crystal line is capable of operating at rates up to 16 feet per minute and accepts profiles up to 22 feet in length. The finishing line features a large load/unload area followed by a five-stage inline wash and pre-treatment system. The pre-paint process is completed with a 100 linear-foot moisture drying oven.
Twin 37-foot Nordson Excel 2000 powder-coat spray booths are the next step in the operation. Each booth is equipped with 16 spray guns that can be controlled automatically or manually. Automatic control for every type of surface and profile configuration is facilitated through Nordson’s iControl™ integrated control system. A 248 linear-foot curving oven with a maximum temperature of 450° Fahrenheit completes the operation.
“We have worked hard to emerge literally from the ashes like a phoenix and construct a very modern operation, allowing us to supply not only our parent company but also other aluminum extrusion users,” said James Hu, president of Crystal Extrusion Systems. “Also with the completion of the paint line and our increase in extrusion activity we have added 13 jobs to our operation.”
In the January issue of DWM (see forecast article, page 36) the name of Plastpro’s plant manager, Franco An, was misspelled. We regret the error.
Marvin Windows and Doors of Warroad, Minn., announced that it has donated more than $115,000 toward hurricane recovery. Honorary chairperson William S. “Bill” Marvin presented The Salvation Army, American Red Cross and Habitat for Humanity with checks to aid in hurricane disaster relief and rebuilding programs …
Ply Gem Industries to Purchase Alenco
Ply Gem Industries Inc., headquartered in Kearney, Mo., and its private equity sponsor, Caxton-Iseman Capital Inc., have announced that Ply Gem has entered into a definitive agreement to purchase AWC Holding Company and its subsidiary Alenco in a cash transaction valued at approximately $120 million. Alenco is a low-cost, vertically integrated manufacturer of aluminum and vinyl windows and doors, headquartered in Bryan, Texas.
Completion of the transaction, which is expected to occur in or before March 2006, is subject to customary closing conditions.
“We expect the combination of Ply Gem and Alenco will enable us to capitalize on attractive market opportunities,” said Lee D. Meyer, president and chief executive officer of Ply Gem. “Alenco is an important element in establishing a footprint to serve our growing regional and national customers and accelerate our growth in the window segment. Alenco’s products and service capabilities are extremely well respected and utilized in new construction. We look forward to joining forces with Brian Redpath, his outstanding management team and all of the Alenco employees.”
“We are pleased by the progress we have made in our Ply Gem investment,” added Robert A. Ferris, managing director of Caxton-Iseman Capital. “Since we acquired the company in February of 2004, Lee Meyer and his team have continued to post solid financial and operating results. We believe the acquisition of Alenco and its great product line presents Ply Gem with many exciting opportunities. The entire senior management team led by Brian Redpath will remain in place and will have an important equity investment in Ply Gem.”
ICC Asks AAMA to “Simplify” Process for Code Compliance
According to information from the American Architectural Manufacturers Association (AAMA), its Harmonization Task Group (HTG) has received feedback from the International Code Council (ICC) stating that one of its objectives is to “simplify” the process for code compliance.
The HTG is charged with coordinating all revisions to “AAMA/WDMA/CSA 101/I.S.2/A440-05” Standard/Specification for doors, windows and unit skylights. It is comprised of members of the Window and Door Manufacturers Association, Canadian Standards Association and AAMA.
Specifically, the ICC has indicated that code officials find the current window classification rating system confusing and difficult to interpret. The ICC representatives have asked the HTG to consider revising the joint standard/specification ratings.
According to information provided by AAMA, the HTG has discussed one possible solution: reducing the number of window classifications from five to three. This would be accomplished by eliminating the current LC and HC classifications from the standard/specification. The rationale of this suggested change is to simplify and clearly differentiate the product classes.
The three members on the HTG representing AAMA surveyed the association’s members in January to help the task group gain a better understanding of the association’s membership’s feelings toward this possible solution. AAMA is not releasing the results of the survey beyond the use of the task group. Document approval is proposed to be ready for print in November 2007, according to information from AAMA.
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