Freedonia analyst weighs in on acquisition and merger of Ply-Gem and Atrium Windows & Doors
CLEVELAND — Two of the country’s leading window producers are set to join forces.
Building materials manufacturer Ply Gem – which ranks among the top five suppliers of windows and doors to the US – announced on Wednesday that the company will be sold to private equity firm Clayton, Dubilier & Rice (CD&R), which will also purchase major window and door producer Atrium.
The combined revenues from Ply Gem and Atrium are expected to exceed $2.4 billion. C&DR will own 70% of the new company, while Atrium shareholders (which include funds managed by Golden Gate Capital) will control the remaining 30%.
According to Freedonia Group Analyst Carolyn Zulandt, “Ply Gem and Atrium are complementary businesses with broad window and door product offerings. The two companies attempted to merge over 20 years ago, but Ply Gem eventually terminated the agreement and accepted an offer from building products firm Nortek.”
Zulandt further explains: “This new combined company will benefit from improved production and distribution efficiencies, as well as advantages like shared technological expertise in a very competitive industry. Together, Ply Gem and Atrium should capture a share of the US window market that comes closer to that of industry giant Andersen than any other supplier.”
She continues, “The greater economies of scale and scope of the larger combined company should also make it a stronger competitor in the other building product markets served, which include doors, fencing, roofing, and siding.”