Canadian vinyl siding maker Kaycan Ltd. has signed a letter of intent to buy Louisiana-Pacific Corp.'s vinyl siding operations for an undisclosed sum.
If the deal is finalized, Montreal-based Kaycan will operate the LP facilities under the name of newly formed affiliate KP Building Products Inc.
Kaycan would assume LP's Maxim and Norman Rockwell brand names as well as LP's two vinyl siding extrusion facilities in Acton, Ontario, and Holly Springs, Miss., and a warehouse in Milton, Ontario.
Kaycan operates three vinyl siding plants in North America - in Cowansville, Quebec; Carstairs, Alberta; and Burlington, Vt. The LP acquisition would nearly double Kaycan's capacity and perhaps its annual sales. LP reported $123 million in vinyl siding sales in 2004. The two LP plants have capacity to extrude about 3.5 million squares of vinyl siding annually.
Kaycan, a privately held and historically tight-lipped company, will continue to pursue growth opportunities, said Kaycan President Lionel Dubrofsky in a Nov. 8 telephone interview.
``Over the last couple of years, we've been purchasing companies. This one provides a tremendous opportunity to grow the business,'' Dubrofsky said.
He said Kaycan intends to launch new products but he declined to provide any details.
LP put its vinyl siding operations up for sale earlier this year. That Kaycan has emerged as the prospective buyer came as a surprise to some industry officials.
One vinyl siding executive said Kaycan has not been a major player in the industry to date, but said that with LP's business, that could change. If the LP deal is approved, Kaycan probably will be the No. 6 or No. 7 provider of vinyl siding in North America, he said.
``With change, comes concern,'' he said. ``Who are these new guys and what are they all about?''
Kaycan has more than 1,100 employees and owns 62 distribution centers in North America.
The 31-year-old company also manufactures aluminum siding and rainwater products, and started extruding vinyl in the mid-1980s. The company operates five nonvinyl manufacturing facilities.
Dubrofsky said the 200 workers at the LP plants will retain their jobs, and Kaycan will look to expand those facilities further.
LP officials said it is too early to determine the fate of LP's vinyl siding executives.
LP, a building products giant headquartered in Nashville, Tenn., stated a few years ago that its desire was to operate only in markets where it held a top-three market-share position.
``We're not there in vinyl,'' said LP spokeswoman Mary Cohn. ``Kaycan is established in vinyl manufacturing. It's what they do.''