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Issue@Hand
Odds Are
The recent purchase of Vitro America’s assets by Sun Capital
got me to thinking about Mickey Binswanger the other day. He was winding
down his career about the time I got into the glass industry. Even at
a young age, it was easy to recognize what a powerful force he, his family
and his company were in the glass industry. So I figure he would be wondering
right about now: What’s going to happen to Binswanger?
For now, let me just focus on Binswanger, the retailer, and save the distribution
company, ACI, for another time. Primarily a nationwide chain of auto and
flat glass retail locations, Binswanger has particular strength in the
Deep South and Texas. It does not fit so easily into the newly-created
household, though, complete with sister-wives Arch, UGC and Vitro America,
and there has been a fair amount of speculation about what will happen
to it. So, based on absolutely nothing other than my own reasoning and
with no information beyond that (meaning I have not talked to anyone about
this), I’ve included some possible scenarios below. See what you think:
Scenario 1: Sun keeps Binswanger and integrates it into the new combined
company. While this may happen in the short term, it does not make
sense for the new mega-company in the long run. Binswanger just doesn’t
fit its model nor its core activities. Odds of this happening: 3-1.
Scenario 2: Sun pulls Binswanger out as a separate company, but maintains
ownership. A bit more probable, especially if Sun needs some time
to position Binswanger for sale, but still not likely. Odds: 2-1.
Scenario 3: A team lead by Binswanger ex-pats buys it. There’s
a mighty talented team that includes Tom Sistrunk, vice president and
general manager, who might want to put a group of former employees together
to find some capital and go for it. Interesting theory, but my gut says
if it’s not in the works already, it won’t happen. Odds: even.
Scenario 4: Vitro buys it back from Sun. Well, they did it once and
they could do it again. But Vitro Vidrio S.A.B. has quite a full plate
with its own bankruptcy and entanglements, so the timing probably is not
right. Odds: 1-2.
Scenario 5: Sun sells Binswanger to another U.S. retailer. This
is the most likely scenario. The auto glass retail locations would be
extremely appealing to certain auto glass chains, while the strong architectural
branches would attract a limited, though serious, group of suitors. Odds:
even.
Who then might possibly purchase Binswanger? Since I am in an odds-making
mood, here’s my take on that, too:
An auto glass chain such as Safelite or Glass America: A likely
scenario as many of Binswanger’s location would be of interest to either
company. Even odds on this one.
A franchise organization such as Glass Doctor: This scenario has
been mentioned a number of times, but I find it unlikely. Glass Doctor
is a franchisor with its own strong branding. It still can sell franchises
in the same location as Binswanger branches without having the cost of
purchase and rebranding. Odds: 20-1.
A manufacturer with vertically integrated capacity in auto and flat
glass: There’s one company in the United States that currently meets
this description and could fit the bill—and it currently is in expansion
mode on the automotive side and knows Sun well from its bankruptcy purchase
of Arch (as this particular company was one of Arch’s creditors). If I
were a betting woman, I’d bet on that.
Stay tuned to www.USGNN.com™
for the latest as this story unfolds, and be sure to send your own theories
to me at deb@glass.com.
-Deb
USG
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