KPS Capital Partners to Acquire Oldcastle BuildingEnvelope® for $3.45 Billion

For more than two decades, Dallas-based Oldcastle BuildingEnvelope® (OBE) has taken what some might call an aggressive approach to acquisitions. Since 2000, OBE, as part of Dublin’s CRH plc, has acquired multiple companies, from glass fabricators to curtainwall manufacturers and suppliers. Arguably, it’s most notable acquisition came in 2015 when it purchased C.R. Laurence for $1.3 billion. Now, OBE is being acquired—a move that CEO Liz Haggerty described as the start of a journey to become an independent company.

On February 28, KPS Capital Partners LP (KPS) announced that it had signed a definitive agreement to acquire OBE from CRH for approximately $3.45 billion in cash through a newly formed affiliate. The transaction is expected to be completed in mid-2022.

Speculations regarding the possible $3 billion sale were reported late last year, which caused CRH’s stocks to rise. OBE has more than 6,700 employees and operates 84 manufacturing and distribution facilities in five countries.

“The entire OBE management team looks forward to partnering with KPS as the company begins its journey as an independent company. KPS has an exemplary track record of investing in and improving manufacturing businesses, and we are exceedingly confident that they are the right partner to help us execute on our strategic plan,” says Haggerty. “We will continue to build on our industry-leading reputation for quality, reliability and product innovation. KPS’ experience with manufacturing businesses and the significant capital resources available will allow us to invest in our commercial and operational growth strategy. We intend to expand our capabilities as a customer-oriented solutions provider in architectural hardware, glass and glazing markets. We are very excited about
OBE’s future opportunities and we have found a great partner in KPS to capture them.”

KPS is a global private equity firm that makes controlling equity investments in manufacturing and industrial companies across diverse industries. As of December 31, 2021, it had approximately $13.1 billion of assets under management. Speira, a European manufacturer of advanced rolled aluminum products, is among the company’s active investments. Last March, the private equity firm bought the aluminum rolling business of Norwegian aluminum and energy company Norsk Hydro ASA for approximately $1.64 billion.

“We are thrilled to acquire North America’s largest provider of architectural hardware, glass and glazing systems. OBE is the only ‘one-stop shop’ for every critical product a glazing industry customer needs, and the company serves attractive, growing end-markets. We intend to drive profitable growth by providing the company with the financial resources to invest in commercial and operational excellence …” says Raquel Vargas Palmer, co-managing partner of KPS.

In its own announcement, CRH said OBE comprises its entire building envelope business which provides architectural glass, storefront systems, architectural glazing systems and related hardware to customers primarily in North America. In 2020, the business generated EBITDA* of $337 million, profit before tax of $210 million; gross assets as of June 30, 2021 amounted to $2.5 billion.

According to CRH, “the decision to divest at an attractive valuation follows a comprehensive review of the Business and demonstrates CRH’s active approach to portfolio management, the efficient allocation of capital and the creation of a simpler and more focused Group. The proceeds from the divestment will be incorporated into the Group’s capital allocation resources, focused on value-enhancing capital expenditure, value-accretive acquisitions and cash returns to shareholders.” BofA Securities and J.P. Morgan Securities LLC acted as financial advisors to CRH plc. Citi acted as financial advisor and Paul, Weiss, Rif-kind, Wharton & Garrison LLP served as legal counsel to KPS and its affiliates.

* Earnings before Interest, Taxes, Depreciation, and Amortization.

Solar Innovations Now a Fortune Brands Company

Fortune Brands Home & Security Inc. completed the acquisition of Solar Innovations LLC, a Pine Grove, Pa.-based producer of wide-opening exterior door systems and outdoor enclosures, in January. The purchase price, net of tax benefits, was up to $63 million. Solar Innovations will be part of Fortune Brands’ Outdoors & Security business segment. Its products will support the segment’s outdoor living strategy and help Fortune Brands further capitalize on the outdoor living space and trends.

Solar Innovations has 135 employees, and holds approximately 30 patents. Its management team, associates and facilities are expected to remain in place.

GMM Acquires Majority Shares of Bavelloni SpA

GMM, an Italian provider of cutting, edge polishing and water-jet machinery, acquired 52% of Bavelloni SpA shares, creating one of the largest groups to offer glass and stone fabricating equipment worldwide. Combined, the two companies have exceeded $110 million* in turnover, according to a press release.

The group will integrate their respective technologies in the annual production of over 800 machines that will consist of three main business units: stone with the GMM brand, glass with the Bavelloni brand and fabrication materials with the Techni Waterjet brand.

Bavelloni SpA partners and members of the board of directors, Federico Bassi, Roberto Califano and Sergio Valsecchi, retain 48% of Bavelloni shares and will continue to manage the company.

*Indicates financial information converted from Euros to US dollars on February 18, 2022.

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