Issue At Hand March 2022

OBE, OMG

The news since our last issue of the sale of Oldcastle Building Envelope® (OBE) was expected. The buyer was a bit of a surprise, and the price was a shocker. (For more details, please see the article on page 16.)

Somehow the news that Irish company CRH was interested in divesting of OBE made its way into the business press late last year. This in itself was highly unusual, as the parties involved generally take great pains to keep such information confidential until a deal, or at least an agreement in principle, is completed. They do so for a variety of reasons including security and regulatory ones. I could not think of another case where an impending sale had been “leaked” to the public without closing shortly thereafter. When Bloomberg News published the original story on December 7, it seemed a deal would be announced in a few days or, at the very least, close by the end of the year.

But that never happened, leading me to wonder if a deal in negotiation had not been consummated and a new suitor—or at least one with deeper pockets—was being sought.

The buyer, KPS Capital Partners LP, has completed more than 100 controlling investments through six different funds in industries such as auto parts, capital equipment, healthcare, consumer and luxury products, among others. KPS is a global firm with an investor base of 26 countries.

KPS paid $3.45 billion in cash for OBE and its holdings. The sale includes C.R. Laurence, which OBE had purchased in September 2015. Our daily e-news service, USGNN.com, at that time, reported that the CRL purchase was made for a total consideration of $1.3 billion, which included deferred consideration at a net present cost of $86 million, payable over five years. The business was acquired debt-free.

A lot has changed since then. The effects of the pandemic, the labor shortage and an exit of many long-time employees at C.R. Laurence, as well as the opening of a new competitor, in particular, all bring new challenges. “We look forward to partnering with OBE’s talented employees and management team under the leadership of president and CEO Liz
Haggerty to accelerate the company’s value creation opportunities,” said Raquel Vargas Palmer, co-managing partner of KPS.

OBE has the opportunity to become the “superstore” for the entire glazing industry—in all its facets. Whatever comes next will be interesting.

—Deb

P.S. I am looking forward to seeing you at Glass Expo Northeast ’22 to be
held in Uniondale on Long Island April 6-7th. There’s a free pass on page 85. I hope to see you there!

To view the laid-in version of this article in our digital edition, CLICK HERE.