DMC Global to Acquire 60% Controlling Interest in Arcadia Inc.

DMC Global Inc., a diversified holding company, has signed a definitive agreement to acquire a 60% controlling interest in privately held Arcadia Inc. for $282.5 million in cash and DMC stock. Arcadia is a U.S. supplier of architectural building products, including exterior and interior framing systems for low and mid-rise commercial buildings, windows, curtainwalls, interior partitions and highly engineered windows and doors for the high-end residential real estate market.

According to a press release, the acquisition includes:

  • $262million of the purchase price to be paid in cash and $20.5 million will be paid in DMC stock; A cash portion to be financed with cash and marketable securities on DMC’s balance sheet and funds from a $150.0 million senior credit facility.
  • DMC’s total debt-to-adjusted EBITDA leverage ratio after closing will be 2.79 based on total borrowings of $150.0 million and pro forma adjusted EBITDA of $53.7 million; total net debt-to-adjusted EBITDA leverage ratio will be 2.25 based on net debt of $120.8 million and pro forma adjusted EBITDA of $53.7 million.
  • The transaction value is 8.6 times Arcadia’s trailing 12-month adjusted EBITDA of $54.6 million as of September 30, 2021.
  • DMC to acquire the remaining 40% interest in Arcadia through a three-year put and call option with a floor valuation of $187.1 million.

“This is a milestone transaction for DMC and aligns with our strategy of building a diversified portfolio of industry-leading businesses with differentiated products and services,” says Kevin Longe, DMC’s president and CEO. “The acquisition of Arcadia will double DMC’s consolidated sales, strengthen our gross margins and provide diversification outside our more cyclical energy and industrial infrastructure markets,” Longe adds that he is thrilled to welcome CEO Jim Schladen and Arcadia’s 850 employees to the DMC family.

“We look forward to DMC’s support as we expand Arcadia’s capacity and increase its position in the commercial and high-end residential architectural products markets,” Schladen says. “I am confident this will be an outstanding partnership that will provide long-term benefits to Arcadia, DMC and our stakeholders.”

According to DMC, the company expects the acquisition will be accretive to earnings within the first year. Arcadia will operate as a standalone business of DMC and will be led by Schladen and his management team.

According to the press release, DMC will purchase a 60% interest in Arcadia for $282.5 million, which is subject to final purchase price adjustments and closing conditions.

The total implied transaction value is $469.6 million and closing is expected to occur prior to December 31, 2021.

This entry was posted in News, Today's News and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.