Nortek Inc. is building upon last year's acquisition of PlyGem Industries Inc. with another vinyl siding producer: Napco Inc. of Valencia, Pa.
Nortek on Sept. 2 announced it agreed to acquire privately held Napco, which sold more than $90 million worth of siding and accessories, fabricated vinyl windows and coil coating, according to a news release. Napco runs three production facilities within a few miles of each other in western Pennsylvania.
The companies did not reveal terms, but said the deal will close by late September or early October.
Napco's siding business will be combined with Variform, Nortek's siding subsidiary, once the deal is finalized, Nortek Vice President Richard Harris said in a Sept. 4 telephone interview. Napco's window fabrication operations will be merged with Nortek's Great Lakes Window Inc. subsidiary.
``Napco is a very well-run organization with high-quality products,'' Harris said, adding the purchase would ``fill in a lot of product lines we don't have now.''
Folding Napco into its portfolio could help boost former PlyGem division Variform Inc. of Kearney, Mo., into a top-10 spot on Plastics News' next ranking of pipe, profile and tubing extruders.
Variform reported an estimated $188 million in vinyl siding sales in 1997, placing it 15th on this year's list. The 10th-ranked company had an estimated $212 million in sales.
``I think we're going to see it happen,'' Harris said about Variform's potential rise in the rankings. ``These companies are a very good fit.''
While Harris said Nortek will keep Napco's facilities running, the deal will further shrink the number of independent players in the siding industry.
Other recent deals include Owens Corning's separate purchases of Fibreboard Corp. and Amerimark Building Products Inc. in 1997. Those moves, which built upon earlier consolidations of the two targets, boosted Owens Corning to more than $257 million in 1997 extrusion sales, compared to zero in 1996.
The vinyl siding market continues to grow at a double-digit rate, but siding prices have been low in 1998 because of heavy competition among fewer players, excess capacity and low vinyl prices, according to the disclosure documents of a number of the industry's public companies.
While Napco has grown about 20 percent a year for the past six years, Nortek — with its technical and marketing expertise — will help the business expand even more, according to Napco President Jim Wolf.
``We wanted to continue that growth,'' Wolf said, adding that the company considered a public offering of its own and other types of partnerships to enhance its position.
``The Nortek situation seemed to be the best in terms of a match,'' he said.
Most of Napco's current senior management will stay in place, Wolf said.Nortek, which also manufactures wood and vinyl windows and a variety of other building-related products, has 10,000 employees and annual sales of about $2 billion, Harris said.