Anatomy of a Successful
Kolbe & Kolbe and Point
Five Windows – One Year Later
by Michael Collins
September 25, 2009, marked the first anniversary of the
acquisition of Point Five Windows in Fort Collins, Colo., by Kolbe &
Kolbe Millwork Co. of Wausau, Wis. The deal was very simply a case study
in an acquisition done right.
If the success of an acquisition is judged by whether it met the expectations
of the parties involved, then this acquisition has been a great success.
However, most acquisitions don’t turn out this way, despite the fact that
acquisitions remain an important avenue of growth in the door and window
industry, as shown in the chart below. Accordingly, there is value
in analyzing the elements that made the Kolbe-Point Five acquisition a
success. By doing so, we may provide other potential transaction participants
with a blueprint of how to ensure the success of the acquisitions they
Initiation of the Transaction
The sale of a company typically begins with one or more factors motivating
the owner to seek a buyer for their company. In the case of Point Five
Windows, former owner Dave Lundahl had several reasons for exploring a
sale and he had considered the move for several years. In a recent interview,
Lundahl explained that he felt proud of what he had built, but that he
knew that another owner would be in a better position to take the company
to the next level. Also, his children were too young to take over the
company. A final factor driving the decision to sell his company was that
he and his wife, who also worked at Point Five, wished to travel more
and enjoy the value they had built up in their business.
By a coincidence of timing, Kolbe approached Lundahl regarding Point Five
at the same time that Lundahl was preparing the company for sale.
We followed up recently with Michael Salsieder, the president of Kolbe
& Kolbe, regarding the Point Five acquisition. Salsieder explained
that the initial interest in Point Five Windows stemmed from Kolbe’s desire
to round out its existing high-end door and window business. (Point Five
Windows manufactures door and window products for ultra high-end residential
applications. It is common for Point Five to win projects involving palatial
residential estates costing $20 million or more.)
“We saw that the team at Point Five had a corporate mentality and a work
ethic that was similar to our own,” says Salsieder. “While our companies
were separated by many miles, we were very closely aligned on these important
When an acquisition reaches the point where the buyer has been selected
and has signed a letter of intent, it is common for the seller’s second
tier of management to be introduced to the buyer. That meeting is always
critical, since it is the second tier of management that will remain with
the company after a transaction. Throughout the discussions leading up
to the acquisition of Point Five, Salsieder and his team continually assured
the Point Five team that their goal was not to “Kolbe-ize” Point Five
after the acquisition. They were interested in Point Five because it was
executing on its business plan and had a capable management team. The
assumption was that those aspects of the company were important to its
success and shouldn’t be tinkered with. There were opportunities for economies
of scale, such as insurance and administrative functions, but these are
non-core aspects of a company. The core culture at Point Five was working
well and was left unchanged. Jeff Delonay of Kolbe was named president
of Point Five following the acquisition. In managing Point Five, he relies
upon the management team there to provide the day-to-day guidance for
the business, while he focuses on overall strategic planning.
“There has been a lot of communication back
and forth and a lot of both companies listening to each others’ needs,”
Another aspect that helped smooth the transition was the fact that Lundahl
had been, over the prior several years, transitioning his duties to members
of his management team.
While the second tier of management typically becomes involved with a
buyer prior to an acquisition’s completion, rank and file employees usually
find out about the sale of a company only after the deal is consummated.
The Kolbe management team addressed any initial anxiety among Point Five’s
employees by communicating Kolbe’s excitement to be working with the Point
Five team. Anxiety quickly gave way to excitement as Point Five’s employees
came to see Kolbe as a well capitalized company intent on growth. All
around them, other companies were shuttering plants and laying off employees.
Kolbe, by contrast, was undertaking an expansion during a difficult period.
Kolbe’s employees also greeted the Point Five acquisition with a great
deal of enthusiasm. Salsieder reports that Kolbe’s employees are updated
regularly regarding the company’s strategic plans. They saw this acquisition
as a strong fit with those strategic plans. They, too, were pleased to
see that Kolbe was expanding at a time that others were retrenching. Delonay
reports that the excitement extended to Kolbe’s sales force, who were
pleased to have access to Point Five’s products in calling on architects
that specify high-end door and window products.
With the employees and sales team focused on the future, the attention
turned to capturing synergies in the area of manufacturing. Kolbe’s management
team confirms that the acquisition of Point Five has involved a true exchange
of best practices. While there were a number of lean practices already
in place, Kolbe helped take Point Five’s lean efforts to the next level.
Another benefit to Point Five was having access to Kolbe’s product testing
facilities. Being able to certify its products has helped Point Five further
penetrate the impact zone. Best practices have flowed in the other direction
as well. Point Five’s engineers have provided Kolbe with ideas regarding
new ways to seal large high-end windows against the elements effectively,
as well as other proprietary aspects of constructing high-end and oversized
In any acquisition, once employees and manufacturing methods have been
addressed, both companies’ customers must accept the combination in order
for it to be a complete success. While Point Five marketed its products
primarily through specifying architects, Kolbe had built a national distribution
channel in addition to its architect referral partners. Since its distributors
call on a large number of architects and builders, Kolbe was able to offer
Point Five immediate access to additional avenues for getting referrals
to high-end business.
his team continually assured the Point Five team that their goal was not
to Kolbe-ize’ Point Five after the acquisition.
Both parties to the Kolbe-Point Five acquisition report that the transaction
has been a success. Lundahl, his wife, and Gordon Hannaford, who owned
a minority stake in Point Five, remained with the company on a consulting
basis for a brief transition period.
He hasn’t retired completely, though, and continues to work diligently
on two window-related products in which he sees great potential. The first
is a window with radiant glass that produces heat, which he develops through
a company called Energized Glass. The radiant glass can prevent steam
from collecting on windows near hot tubs and provide a source of heat
for the living space that is located near oversized windows in cold environments.
The other product is a retrofit window balance that will allow industrial
property owners to convert large, outdated single-hung windows to more
energy efficient double-hung windows by overcoming the weight limitations
on the sash.
The Kolbe team, too, views the acquisition of Point Five as a success.
Despite having completed this acquisition during one of the most difficult
periods the United States has faced since the Great Depression, the transaction
has helped Kolbe continue to move its brand image to the higher end of
the market. They advise other companies contemplating acquisitions to
conduct careful due diligence on the front end and to choose a business
that is performing well and would be a strong fit with their own. By doing
so, it is more likely that a given transaction will be a success for all
Michael Collins is vice president of the building products group
at Jordan, Knauff & Company, an investment banking firm that specializes
in the door and window industry. Jordan, Knauff & Company served as
the exclusive advisor to Point Five in its sale to Kolbe & Kolbe.
© Copyright 2009 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.