Houston-based Quanex Building Products Corp. will acquire Woodcraft Industries, a top supplier of doors and components to the kitchen and bathroom cabinet industry.
The all-cash transaction, which is expected to close in the fourth quarter of 2015, is valued at approximately $248.5 million. It will be funded by a combination of cash, revolving credit and a loan. Woodcraft is expected to add $240 million in revenues to Quanex’s growing portfolio as a supplier of building products components.
Woodcraft, based in St. Cloud, Minn., will operate as a wholly owned subsidiary of Quanex. Woodcraft’s management team will continue to operate the company.
“Upon closing, the transaction will represent the best of both worlds: a continuation of Woodcraft’s craftsmanship and unrelenting customer focus combined with access to Quanex’s resources in pursuit of new opportunities in the growing cabinet industry,” said Dale Herbst, Woodcraft’s president, in a statement. “More generally, it was important that we align with an organization that shares our values and that is committed to expanded opportunities for our employees and service excellence for our customers. Quanex is an ideal partner for us moving forward, and we look forward to a bright future together.”
Woodcraft provides hardwood and engineered wood doors and components to kitchen and bath cabinet manufacturers throughout North America. Woodcraft has 13 production facilities and four distribution centers in the United States, Canada, and Mexico that manufacture and ship a broad range of products, including hardwood doors, hardwood components, engineered wood and drawer components.
“Quanex’s growth strategy is based, in part, on highly complementary acquisitions that contribute proven technologies, products and enhanced scale,” said Bill Griffiths, Quanex’s chairman, president and CEO, in a statement. “Woodcraft is an ideal strategic and financial fit in this regard. It is, first and foremost, a well-run company that adds $3 billion to our addressable market. Woodcraft’s breadth of products and stellar customer relationships are unmatched in the industry and also represent uniquely positive and durable attributes. Woodcraft’s business model is also very similar to our operations in that they serve large OEM customers. Finally, we expect the acquisition will deliver clear financial benefits to Quanex shareholders as we continue to prudently build the company for sustained profitability.”