T R E N D T R A C K E R  
016: Solid Year for Mergers, Growth  
Though Slower Than 2015, It’s Proof the Industry is Healthy  
B Y M I C H A E L C O L L I N S  
t the beginning of each year, we  
analyze the level and type of  
activity in three key areas of the  
Company Activity by Material in 2016  
door and window industry: mergers  
and acquisitions (M&A) activity, plant  
expansions, and bankruptcies and  
business closures. Fortunately, this  
last category has seen the least activi-  
ty in the past several years. We tracked  
only one small window manufacturer  
that closed its doors in 2016, the f rst  
we’re aware of since one in 2013.  
The level of M&A activity in the  
door and window segment in 2016  
was strong, though slower than in  
30% 30%  
015. Last year saw 16 mergers or  
acquisitions where at least one of the  
transaction partners was U.S.-based,  
down from 21 the prior year.  
Source: Building Industry Advisors  
Who’s Buying?  
focused on, windows were once again saw 28 in 2006. Much of that activ-  
Acquisitions last year were dom- the primary M&A category, with 63 ity was based on the belief that the  
inated by strategic buyers already percent of acquisitions. This repre- housing market would continue to  
engaged in the industry, at 81 percent sented a solid increase from roughly operate at bubble levels. In 2008, 28  
of the total. This is slightly higher half of deals in 2015. Entry and interi- plants were shuttered, a few of them  
than last year and higher than the or door companies stayed the same at the same facilities that were expanded  
6 percent of 401 door and window about 30 percent of deals. Multi-panel or built in 2006. Last year’s expansions  
deals completed since 2000 that door deals dropped from three trans- consisted of two greenf eld construc-  
were undertaken by strategic buyers. actions in 2015 to just one this year. tion projects and f ve expansions of  
Financial buyers engaged in fewer With regard to materials, vinyl-ori- existing facilities. We tracked only one  
deals in 2016, likely due to our hav- ented deals dropped from 39 percent plant closure in 2016, which was a  
ing progressed a year further into the in 2015 to 30 percent last year. Wood rationalization of redundant plants  
recovery. Strategic buyers are more deals fell to 30 percent in 2016, while rather than a sign of trouble.  
comfortable than PE funds with the the sale of several aluminum window  
Two-thirds of expansions involved  
notion that they will be the owner manufacturers caused that category windows, and 70 percent were under-  
of an acquired company through the to nearly double to 30 percent of deals. taken to produce vinyl products.  
next soft patch or outright recession.  
Most companies offer an array of Who’s Growing?  
products, but if we force them into  
These key measures indicate that  
the industry is performing very well.  
Manufacturing plant expansions The suppliers of capital needed for  
the three categories of entry and are another key indicator of the over- these deals have made meaningful  
interior doors, multi-panel doors all health of the door and window bets that it will continue to do so.  
and windows, we can glean which segment. The seven plant expan-  
segments are of greatest interest for sions in 2016 came close to the recent Michael Collins is an investment banker  
acquisitions. Allowing companies to peak of nine expansions in 2012. The and a partner in Building Industry Advisors.  
be f agged in more than one category high-water mark for expansions came He specializes in mergers and acquisitions in  
to ref ect the product they’re most just before the recession, when we the door and window industry.  
Door & Window Market  

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