Houston, Texas — NCI Building Systems, which makes and sells polyurethane insulated panels for commercial buildings, is taking over Ply Gem.
Ply Gem makes siding, windows, patio doors, cellular PVC trim and mouldings for single- and multi-family homes.
The all-share deal is designed to create a one-stop solution for exterior building envelopes.
Publicly listed NCI will issue 58m shares to Ply Gem and gain 53% of the unnamed company. Ply Gem will have the remaining 43%. NCI will have more seats on the board.
Ply Gem was number 2 in the most recent ranking of North American pipe, profile and tubing processors by Plastics News. The publication estimated that its sales in the region were $1.5 bn.
Ply Gem has about 11,600 employees at 35 facilities in North America. About 5300 employees work at 38 NCI manufacturing sites there.
Sales of $4.5 bn are expected in 2018, with cost savings of over $150 m/year. The new company will have a pro forma enterprise value of $5.5 bn and an implied equity value of $2.6 bn.
NCI Chairman James Metcalf will be chairman and CEO of the new company. The headquarters will be in Cary, North Carolina, the home of Ply Gem, and Ply Gem CFO Shawn Poe will stay on.
‘This transformational combination creates the leading exterior building products company with multiple avenues for further growth,’ Metcalf said in a news release.
‘Both companies are experiencing sustained momentum driven by meaningful cost savings… margin expansion and longer-term M&A opportunities.’
The deal is expected to close in the fourth quarter of 2018.
This story first appeared in Plastics News.