Home goods and building products manufacturer Masco Corp. is selling its vinyl and composite window and door businesses in a move to reduce exposure to the seasonality of new construction and increase long-term value.
The Livonia, Mich.-based company plans to part with Milgard Windows and Doors of Tacoma, Wash., a maker of vinyl, fiberglass and aluminum windows, and Wales-based UK Window Group, a maker of vinyl windows, composite doors and related products, in separate transactions.
With estimated profile extrusion sales of $83 million, Milgard ranks 47th among North American pipe, profile and tubing manufacturers, according to Plastics News' latest ranking.
Masco also plans to sell its Masco Cabinetry business, which makes wooden cabinets from its base in Ann Arbor, Mich.
In 2018, the cabinetry and windows and specialty products segments reported combined sales of $1.7 billion, including $120 million of operating profit and $161 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
A trio of sales "is the most appropriate path forward to accomplish this value creation," Masco President and CEO Keith Allman said in a June 18 news release. He expects the deals to be done in six to nine months.
When the transactions are completed, Masco will be focused on the repair and remodel segment of the housing market.
"Over the past five years, we have executed on our strategy to reduce our cyclicality by increasing our exposure to the repair and remodel segment of the housing market," Allman said. "The strategic actions we are announcing today will complete the process of reducing our exposure to the new construction segment of the market and position us to focus on our less cyclical Plumbing Products and Decorative Architectural Products businesses going forward."
Milgard sells under its own name while UK Window Group sells under the Duraflex, Griffin, Premier, Phoenix Doors and Evolution brand names.
The two units are currently part of a segment called windows and other specialty products that reported sales of $755 million. The business unit reported a $34 million profit and adjusted EBITDA of $62 million, excluding $5 million of rationalization charges.
Masco Cabinetry reported sales of $950 million. Its products are sold under the Kraftmaid, Cardell, Merillat and Quality brands.
After the divestments, Masco's portfolio will include Behr paint; Delta and Hansgrohe faucets, bath and shower fixtures; Kichler decorative and outdoor lighting; and HotSpring spas.