Alside Inc. could be on the sales block by March.
Publicly held parent company Associated Materials Inc. is considering selling the vinyl siding firm, and hired Salomon Smith Barney as a banker for any potential transaction.
``It's just one of the options that is being explored,'' said Tim Grace, who handles media relations for the Dallas-based parent. ``They want to look at all the various options that are available to them.''
Vinyl siding players that have been active in acquisitions include Toledo, Ohio-based Owens Corning, which acquired two firms in 1997: Dallas-based Fibreboard Corp.; and Raleigh, N.C.-based Amerimark Building Products.
Dave Dimmer, Owens Corning's spokesman, would not comment on whether his firm would consider another acquisition. Under the terms of its Chapter 11 bankruptcy, the company is able to make acquisitions. Even as consolidation continues in the industry, retiring Chief Executive Officer Glen Hiner remarked in a 2001 interview that the firm will continue to be a player in the consolidation game.
Gary Acinapura, president of Pittsburgh-based Alcoa Building Products Inc., has targeted growth by acquisition. Late last year, the company's bid to acquire Cleveland-based Gentek Inc. failed over liability issues. Officials from the firm did not return calls seeking comment.
With its expansive factory-owned distribution network, Alside would be a lucrative purchase to a strategic buyer or an easy entree for a financial buyer, industry insiders have said. Alside operates 80 supply centers throughout the United States, a unique feature in an industry dominated by independent distribution.
Still, that same feature might represent a substantial conflict to players that sell primarily through independent channels, such as Alcoa. Alside operates four extrusion facilities: West Salem, Ohio; Ennis and Freeport, Texas; and Bothell, Wash.
As of Feb. 13, Associated's stock was at an all-time high of $38.25 per share, said Dwain Carryl, an analyst with New York-based Sidoti & Co. LLC. The company formed in 1984 when William Winspear purchased Alside from U.S. Steel and combined it with two other firms. Alside represents more than 87 percent of total Associated Materials sales, according to the firm's third-quarter results.
Grace said Winspear is nearing retirement age. Sources said that may be a reason the parent company would consider selling Alside. But Grace said it just makes sense to explore alternatives.
``It's probably good business form to do that on occasion, especially after you've had a really strong run-up,'' Grace said Feb. 13 by telephone. Grace said Associated could very well retain ownership and carry forward, possibly seeking acquisitions.
Carryl said the Winspear family owns a substantial portion of the company and that perhaps they have a desire to exit the business altogether. ``This would definitely be a case of selling it at the top of the market,'' he said.
According to the firm's third-quarter report, Alside's sales increased 27.1 percent for the quarter to $150.9 million from the same period in 2000, mainly due to higher sales volume of vinyl siding and windows. Alside's unit sales of vinyl siding increased 14.7 percent, compared to 9.5 percent for the same quarter in 2000. Associated will announce fourth-quarter results Feb. 19.