Volume 8, Issue 9 - October 2007

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Industry Reacts to EFCO Purchase

Since it was announced that Pella, Iowa-based Pella Corp. has purchased the EFCO Corp. of Monett, Mo., many door and window manufacturers and others allied to the industry are speculating as to what effect it might have.

EFCO will now become a subsidiary of Pella and will now be known as EFCO, a Pella Company. The transaction occurred on August 28.EFCO will continue to produce its products, which include windows, curtainwall, storefronts and entry systems designed for commercial construction, in Monett. As the business transitions to new ownership, Pella says EFCO’s products will continue to be sold through independent representatives across the United States.

Terms of the sale have not been disclosed.

“The addition of EFCO people, processes and products to the Pella system, along with the support of their independent representatives, will provide even more innovative options for commercial customers seeking quality solutions to meet their fenestration needs,” says Pella president and chief executive officer Mel Haught. “We thank EFCO chief executive officer (CEO) Chris Fuldner and his family and the other EFCO stockholders for the opportunity to purchase the business, which will continue to operate as a privately held company dedicated to quality, innovation and customer satisfaction.”

Fuldner also has announced his retirement. “That is why EFCO was for sale because Chris Fuldner had indicated that he wished to retire and do other things with his time,” says Pella spokesperson Kathy Krafka Harkema. “He felt it was a good time to sell EFCO.”

Mike Farquhar has been named the new president and chief operations officer for EFCO.

Farquhar most recently was general manager of Pella’s Architect Series business unit and has been with Pella since 1995. 

In the statement released by Pella, Fuldner says the acquisition by Pella should allow the business to continue to meet the future needs of the commercial building industry.

“When I joined the business 33 years ago, we employed about 60 people,” Fuldner says. “Today we’re proud to provide careers for the 1,600 people who work for EFCO and we’re very proud the company is joining Pella, an industry leader and innovator which shares the same values, Midwestern roots and strong work ethic focused on serving customers.”

According to Krafka Harkema, a transition team has been put in place to manage EFCO immediately following the sale.In the wake of the sale, many wished to speculate as what it could mean for the industry. Michael Collins of Jordan, Knauff & Co., an investment bank that specializes in the door and window industry and DWM columnist, says the sale represents a turning point in the industry.

“The most notable aspect of the Pella/EFCO transaction, in addition to the size, is that it represents a traditionally residential door and window company crossing over into commercial products,” he says. “This is the type of crossover that we would only expect to take place at the largest end of the size spectrum in the industry, primarily because of the significant execution risk involved in entering such a completely new business segment.”

Economically speaking, though, he believes it’s a good move for Pella—particularly with the housing market in a downward swing. “For Pella, this acquisition provides a portfolio benefit to its revenue streams,” Colllins says. “Going forward, when the residential segment is soft, the EFCO subsidiary will have the potential to perform well, smoothing out the company’s earnings. In the current market, the companies with which we’re in touch that are having a strong year are primarily those that focus in whole or in part on the commercial area.”

He also questions whether other residential window manufacturers might follow suit.

“… The most interesting potential implication of this transaction will be whether it causes the other majors to similarly diversify by buying a commercial company as well,” Collins says. “That remains to be seen.”

Mark Silverberg, president of Technoform North America in Twinsburg, Ohio, also notes that Pella could bring some new knowledge to EFCO in its purchase. “I think it’s fantastic and innovative,” he says. “A solid engineering company is bringing what they learned to the commercial sector. Pella will look to apply lean manufacturing methods to the commercial window business.”

3M Purchases Venture Tape
The 3M Company in St. Paul, Minn., announced in early September that it has purchased Rockland, Mass.-based Venture Tape. The terms of the sale were not disclosed.

3M says the acquisition will expand its product offerings in the area of glazing tapes.

“This acquisition broadens our pressure-sensitive adhesive tape platform, brings new channels to 3M and allows us to expand into adjacent markets such as construction,” says Patrick Deconinck, division vice president, 3M Industrial Adhesives and Tapes Division. “Venture Tape has a strong customer-centric business model, which, combined with our lean manufacturing practices, technologies and global coverage, will broaden and improve our offering to customers.”

Venture Tape president Lewis Cohen says the sale also will benefit his company.

“We see tremendous opportunities to continue to build our business by drawing on the strength of 3M’s resources and technical capabilities,” says Cohen.

VT Industries Acquires IDEAL Architectural
The Holstein, Iowa-based VT Industries has announced that it has acquired IDEAL Architectural Doors and Plywood of New Albany, Ind. The transaction occurred on August 31.

“This acquisition is a welcomed expansion to the VT architectural wood door business,” says Rick Liddell, senior vice president of sales and marketing.

IDEAL will become a division of VT and will manufacture AA grade flush doors, premium grade stile and rail doors, thick doors (2 ¼ inch or more, rated and non-rated), over-size doors (up to 5-0 x 12-0), blueprint matched panels and doors, sketch-faced doors and specialty veneers.

Andersen Sues Pella and W. L. Gore
Andersen Corp. in Bayport, Minn., filed two lawsuits alleging patent infringement against Pella Corp. in Pella, Iowa, and W. L. Gore & Associates Inc. (Gore) in Newark, Del., earlier this year. The door and window giant alleges that Pella and Gore have unlawfully infringed on one or more claims of its two patents for “Reduced Visibility Insect Screens,” U.S. Patent No. 6,880,612 and U.S. Patent No. 7,195,053.

In the filing, Andersen claims the defendants are making, using, offering to sell and/or selling articles, which infringe on the claims of its patents. The company claims to have suffered damages and says it will continue suffering damages unless the court puts a stop to the alleged infringement. A jury trial has been requested and Andersen is suing for damages, court costs and attorney’s fees.

Andersen originally filed two separate suits, one for each patent, but the court has since combined the two cases into one. However, the first of these to be filed was dismissed on July 31, 2007, after Pella and Gore filed a joint motion for summary judgment, which was granted. Andersen has filed paperwork to appeal this dismissed case, so the second case has been stayed, pending the decision in Andersen’s appeal, which will be heard by the Federal Circuit Court of Appeals. The appeal was filed on August 27, 2007. At press time, no judgment had been made in the appeal.

Jordan, Knauff & Co. to Hold Door and Window Industry Update
Jordan, Knauff & Company in Chicago will hold its Fall 2007 Door & Window Industry Update for DWM readers on Wednesday, November 28, 2007, at 2 p.m. EST. The update will be conducted as a one-hour webinar. Michael Collins, a DWM columnist will cover a variety of topics, including an update on the firm’s research on competition from China and other international locales, a summary of recent door and window import figures and a review of recent door and window transactions and plant expansions, among other topics. www.jordanknauff.com/webinar 

Silver Line® Double-Hung Window Honored by Consumers Digest
Silver Line Window’s Series 9500 Double-Hung Window was named a “Best Buy in Replacement Windows: Premium Selection” recently by Consumers Digest.

“No other replacement window offers a better combination of style and substance,” writes the magazine about Silver Line’s Series 9500 vinyl window. 

“We are very proud of this ranking by this extremely prestigious magazine,” says Andrew Karr, vice president of marketing at Silver Line Windows. 

CMI Employees Reach 10-Year Safety Milestone
Chicago-based CMI’s door manufacturing plant in Towanda, Pa., has announced that the employees of its Towanda manufacturing plant set a new company safety milestone on July 27 by reaching 10 straight years without a lost workday accident. The last lost-time incident at the plant occurred on July 12, 1997.

“We are incredibly proud of all the CMI employees who have worked at our Towanda facility over the years and have made safety their top priority day after day,” says Joe Ritsko, CMI safety manager. “To reach a milestone of this magnitude requires a daily commitment from every single person.” 

To help maintain its exceptional safety record, CMI says its employees participate in safety and health teams; develop behavior job analyses; identify and correct deficiencies; and attend mandatory monthly training meetings on chemical safety, hazard communication, fall protection, lift truck operation and recertification, emergency response and other critical workplace activities.

DOE May Change Energy Star® Requirements 
The Department of Energy (DOE) is in the process of tightening its requirements for Energy Star windows. Rich Karney, a DOE representative, spoke at a recent National Fenestration Rating Council (NFRC) meeting about the upcoming changes. 

“The reason [for the change] is that in many cases Energy Star barely, if at all, meets the codes, especially in the north,” Karney told attendees.

Karney said that 53 percent of the market for windows is Energy Star, which means the Energy Star label is losing its meaning to consumers.

He said that DOE is looking at six guiding principles:

  1. There must be significant energy savings;
  2. It must be cost effective for the consumer;
  3. Energy savings must be measurable;
  4. Functionality and performance cannot be compromised;
  5. Proprietary technologies cannot be included to ensure consumers have multiple choices; and
  6. The Energy Star label must provide meaningful differentiation to the consumer.

The earliest effective date of the change would be January 1, 2009. According to Emily Zachery of D&R International, Ltd., a company that works closely with the DOE on the Energy Star criteria, the company is still on schedule for the change in January 2009. The DOE undertook a formal analysis of the situation starting in July and is working with NFRC in this research. The groups planned to wrap up this research in October 2007 at press time and distribute it publicly in December 2007, with plans for a stakeholder meeting to be held in February 2008. http://www.energystar.gov/windows

A word was missing in a sentence in the feature article regarding impact-resistant windows in the July-August issue of DWM, (see page 34). The sentence should have read as follows: 
   Gorell says that some homeowners in Florida may not know that vinyl windows provide better energy benefits than when they install replacement aluminum windows.

Open Energy Corp. in Solana Beach, Calif., announced that it has signed an open purchasing agreement with Motech Solar, the world’s seventh largest producer of solar photovoltaics, to supply 6-inch multi-crystalline cells… Illinois Tool Works Inc. (ITW) in Glenview, Ill., has acquired Tregaskiss Welding Products in Windsor, Ontario, Canada. Tregaskiss is a manufacturer of robotic and semi-automatic MIG welding torches and peripherals, and will continue to operate independently with access to additional resources… 


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