Volume 42, Issue 10 - October 2007
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EFCO Corporation Becomes
The commercial manufacturing world collided with the residential domain on August 28 with the sale of EFCO Corp.—which produces architectural aluminum window, curtainwall, storefront and entrance systems—to the primarily-residential door and window manufacturer Pella Corp. in Pella, Iowa.
The business, now a subsidiary of Pella, will be known as EFCO, a Pella Company. Since both companies are privately-held corporations, terms of the sale have not been disclosed.
Following the sale, EFCO will continue to produce EFCO-brand building products in Monett, Mo. As the business transitions to new ownership, EFCO-brand systems designed for commercial construction needs will continue to be sold through independent representatives across the United States.
On August 31, a representative within EFCO revealed that chief executive officer Chris Fuldner had retired.
“That is why EFCO was for sale, because Chris Fuldner had indicated that he wished to retire and do other things with this time,” says Kathy Krafka Harkema, the spokesperson for Pella. “He felt it was a good time to sell EFCO.”
Mike Farquhar has been named president and chief operations officer of EFCO. He has been with Pella since 1995.
Fuldner said 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 said. “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.”
With the current slump in the residential construction market, it may seem like a smart move for a residential manufacturer to expand into commercial construction.
“I know some people have tried it in the past,” says Bill Carter vice president of sales of Carter Glass Co. in Kansas City, Mo.
“I don’t think that’s a trend,” says Clark Folsom, national marketing manager of United States Aluminum in Waxahachie, Texas.
Oliver Stepe, senior vice president of YKK AP America Inc. in Austell, Ga., says the benefit of the acquisition for Pella may lie in the variety of window fenestration systems the company will gain.
“There is an emerging need to increase the energy efficiency of commercial and residential fenestration systems while maintaining other necessary characteristics such as strength and aesthetics. So, from this perspective, it makes sense that a company like Pella that has interest but possibly lacks the knowledge of the commercial market would acquire a company like EFCO.”
Folsom does believe the sale could be a good move for EFCO, and for the commercial glass industry. “I think they [Pella] have the financial backing to help EFCO succeed.”
Carter agrees that there could be benefits to the commercial glass industry in this new development. “I think it would be a good impact because we need to keep the competition in the marketplace, and EFCO has definitely played a big role in major projects across the country for [several decades].”
There are many questions yet to be answered about the sale, including the influence the primarily-residential manufacturer will have on its new commercial subsidiary, and how long-time EFCO customers will be affected.
“We’re not on the residential side, we know [only] the name Pella,” says Lee Still, warehouse manager with Walker & Laberge in Norfolk, Va. The glazing contractor largely uses EFCO products in its work.
Still says he has heard nothing yet as to how the sale will impact EFCO’s customers. “[It] came kind of as a shock to all of us.”
Carter adds that he can’t help but wonder if Pella will decide to “utilize [its subsidiary] more for expanding their … insulating glass or other contributing products that you use in window making, or if they’re actually going to keep everything in place that EFCO has established over the years.”
While Pella’s goal with this purchase has not yet emerged, industry professionals can make predictions about the challenges the company will face in integrating its new subsidiary.
“I think that they need to keep in mind that there are distinct differences between these two markets,” Carter says. “The type of … codes and compliances and things that are prevalent in the commercial market are really not there in the residential market.”
“For Pella, although they have acquired EFCO, their challenge will lie in the successful integration of the two companies, strategies and corporate cultures,” Stepe says. “We are looking forward to seeing how this new company will emerge and hopefully provide a positive influence and healthy competition within the commercial industry.”