In a deal that will unite two of North America's largest vinyl siding manufacturers, Kearney, Mo.-based Ply Gem Industries Inc. has agreed to buy Alcoa Home Exteriors Inc. for $305 million.
With the acquisition, Ply Gem adds a plethora of building products to its already-large portfolio of established brands.
Ply Gem, which manufactures Variform-brand vinyl siding, now essentially doubles its vinyl siding capacity, while also gaining holdings in aluminum siding, injection molded shutters and other vinyl and aluminum products.
The all-cash deal is expected to close in the fourth quarter.
Alcoa Home Exteriors employs 1,400 at its five manufacturing plants in Atlanta; Denison, Texas; Gaffney, S.C.; Sidney, Ohio; and Stuarts Draft, Va. It is being sold by Pittsburgh-based Alcoa Inc.
As building-products companies are maneuvering to mitigate sales losses from the downturn in construction, the addition of Alcoa Home Exteriors' extensive product portfolio is a calculated step toward further diversification, said Lee Meyer, Ply Gem president and chief executive officer, in a Sept. 25 telephone interview.
``It offers protection against changes in the housing industry,'' Meyer said of the acquisition. ``It gives us a lot of opportunity for cost-side synergies, including raw material purchasing.''
Ply Gem last week announced that Gary Robinette would assume the company's top post Oct. 2, replacing Meyer, who had announced his pending retirement. Robinette previously served as executive vice president of operations for Stock Building Supply.
Meyer said he will stay on in an advisory capacity until the Alcoa deal is finalized.
The future role of Gary Acinapura, Alcoa Home Exteriors president, is uncertain.
Meyer said not all personnel decisions have been made, but that every effort is being made to facilitate a ``seamless transition'' for Alcoa customers.
Ply Gem is owned by New York private equity firm Caxton-Iseman Capital Inc., which bought the building products firm in 2004.
In addition to Variform, Ply Gem also manufactures such brands as Patriot, Alenco, Napco and Kroy.