In a major construction products deal, Cie. de Saint-Gobain is acquiring vinyl siding maker Kaycan Ltd. for US$928 million in cash.
Kaycan is Canada's largest siding maker and does business in the U.S. as well. Saint-Gobain already owns CertainTeed Corp., one of North America's largest siding makers.
The acquisition "gives us a growing presence in North America, which is a growth market," Saint-Gobain North America CEO Mark Rayfield said in a May 31 interview with Plastics News.
Montreal-based Kaycan has annual sales of US$472 million, with more than half of that amount coming from Canada. Vinyl siding accounts for 50-60 percent of the firm's sales. Kaycan operates 12 production plants — nine in Canada and three in the U.S. — and employs around 1,300.
Kaycan sells its siding products through dedicated distribution and channel coverage in big box retail. The firm also recycles post-consumption materials, which can be incorporated into production.
Kaycan's KP Building Products Ltd. unit, based in Holly Springs, Miss., ranks as the 17th largest North American pipe, profile and tubing extruder, according to Plastics News data. CertainTeed is No. 7 in the ranking, with estimated annual sales of $700 million.
In a news release, Saint-Gobain CEO Benoit Bazin said that the acquisition is "an excellent step" for his firm.
"Not only does this acquisition allow us to strengthen our presence in siding both in Canada and in the U.S., but it also allows us to broaden our offering into the exciting growth areas of aluminum and engineered wood siding, largely made with recycled materials," Bazin said.
Kaycan President Lionel Dubrofsky — whose family founded the firm in 1974 — said that Kaycan "has been laser-focused on providing the best customer service possible throughout Canada and the U.S., all while pushing the boundaries of imagination and innovation to expand our product portfolio over the past decades."
The price represents a multiple before synergies of around 11.2 times Kaycan's 2021-2022 EBITDA of $83 million. The deal is expected to close by the end of the year.
Kaycan's U.S. distribution unit will be sold after the deal closes. That unit has annual sales of about $70 million.
The Kaycan deal is Saint-Gobain's second major acquisition in six months. In December, the firm announced plans to buy construction chemicals maker GCP Applied Technologies of Alpharetta, Ga., for $2.3 billion.
Since February, Saint-Gobain has announced almost $300 million in expansion projects in the United States. A textile products expansion in Dublin, Ga., will create 400 jobs. The firm also will double the manufacturing footprint of its CertainTeed Architectural manufacturing site in Lakewood, Ohio, by moving to a new location in nearby Strongsville.
Rayfield said that inflation and rising interest rates haven't affected Saint-Gobain's business so far in 2022.
"Our backlogs are strong for a majority of our products," he added.
Since the pandemic began in early 2020, Saint-Gobain has benefited from the work-from-home trend, which has led to growth in home renovation, according to Rayfield.
Looking ahead to additional deals, Rayfield said that Saint-Gobain "is always looking for good opportunities in all our business lines."
Saint-Gobain is a global construction and industrial conglomerate based in Courbevoie, France. The firm employs 166,000 and posted sales of 44.2 billion euros ($47.2 billion) in 2021.