Caradon plc has concluded a six-month-long downsizing program with the agreed sale of its remaining U.S. door and window businesses to Nortek Inc. of Providence, R.I., for $66 million.
The three businesses included in the sale are residential window, patio and entry door manufacturer Caradon Peachtree Inc. of Atlanta; Caradon Thermal-Gard Inc. of Punxsutawney, Pa., which produces replacement windows, patio doors and sunrooms; and window and door system maker Caradon Windows and Doors Ltd. of Calgary, Alberta.
Together, the three subsidiaries recorded 1998 operating profit of $9 million — before restructuring charges of $6.3 million — on sales of almost $170 million, according to Weybridge, England-based Caradon plc.
Nortek already makes vinyl doors, windows and siding. Richard L. Bready, Nortek chairman and chief executive officer, said the acquisition is important for several reasons.
``Peachtree adds a strong consumer brand name to our window business. In addition, it manufactures and sells entry doors ... a product line which we previously have not offered and which will allow Nortek to offer a more complete package to builders,'' he said.
Thermal-Gard's product line, he said, will enhance Nortek's market leadership in the ``lucrative and growing'' vinyl replacement window market. The sunroom business will complement Nortek's replacement windows businesses.
Meanwhile, Bready added, the Canadian acquisition gives Nortek ``a solid entrance'' to western Canada's strong new-construction market.
``This will be our first window manufacturing facility in the western part of North America and should help expand sales in that region,'' Bready said.
Nortek added to its vinyl sidings business with its September acquisition of vinyl window and siding manufacturer Napco Inc. of Valencia, Pa. Napco has three plants in western Pennsylvania, and Nortek paid about $90 million for that business.
Nortek has annual sales of about $2 billion and employs about 10,000.
Caradon announced that this sale completes the disposal program it started in September. Caradon's management had decided ``to concentrate on fewer larger businesses.''
Caradon has pocketed about £134 million ($214 million) from the sale of subsidiaries, including its Smyrna, Tenn.-based BetterBilt Inc. doors and windows business, which it sold for $16.75 million to MI Home Products Inc. of Gratz, Pa.; and its British PVC window profile, windows and doors firms, purchased by independent English company Bardox Group plc. of Winsford for about $65 million.
Also disposed of was PVC pipe extruder and fitment molder Terrain Ltd. of Aylesford, England, sold to Geberit Group of Jona, Switzerland, for $44 million.
Caradon said it retained one vinyl window and door company, Weru AG of Rudersberg, Germany, because the window and door business in continental Europe is substantially different from that in the United Kingdom.
Caradon plans to concentrate on expanding its core plumbing and electrical businesses. The electrical business produces a range of plastic electrical plugs, sockets and switches and has plastics molding subsidiaries in India and Singapore.
``We intend to build European-scale operations in both areas, which are ripe for consolidation. From a restructured U.K. base, we see real opportunity to expand through a combination of acquisition, strategic alliance and organic growth,'' Caradon CEO Jurgen Hintz said last year.
Caradon's plumbing products are predominantly metal or ceramic.
Last month, Caradon reported 1998 operating profit for continuing operations of £135 million ($216 million) — before restructuring charges of £22 million ($35 million) — on sales of almost £1.3 billion ($2 billion).