TM Capital Building Products Report Industry Spotlight

Transcription

TM Capital Building Products Report
Industry Spotlight
w w w. t m c a p ital.c o m
Building Products Industry Spotlight
Introduction
As building codes tighten, environmental impact awareness
heightens and consumer demand for expanded options
intensifies, the building products landscape is becoming more
sophisticated and diversified. With U.S. residential housing
starts reaching 926,700 units in 2013 (the highest level since
2007) and expected to surpass 1.0 million units in 2014, the
Building Products industry has an established foundation on
which to build over the coming years.
In today’s Building Products industry, new developments in
product technologies are applied broadly across both markets.
Recoveries in both the commercial and residential construction
markets will drive growth and investment activity throughout
the sector.
TM Capital anticipates continued growth in the Building
Products industry in the coming years as it recovers from the
significant, sustained headwinds of the economic recession
that wreaked havoc on consumer confidence, depressed real
estate values and halted investments. In this report, we will
explore the economic factors in residential and commercial
construction that underpin a broad and sustained recovery in
new construction. We will also examine compelling data in
residential fixed investment and the remodeling market that
support demand from a large existing base of residential and
commercial projects. With a solid foundation of demand from
both new construction and existing building stock, we will turn
our attention to the exciting trends we see for value creation
through market consolidation and investment by both financial
sponsors and well-known industry players.
Historically, the Building Products industry has been viewed
through a narrow lens trained on the trends impacting either
the residential or commercial building markets. In this initiating
report on the Building Products industry, TM Capital is taking a
different approach. We are looking at the industry landscape
through a wider lens focused on several major product
categories including: Windows & Doors, Cabinetry, Plumbing,
Hardware, HVAC, Lighting, Countertops, Flooring & Carpets,
Molding & Trim, Roofing, Siding, Insulation, Architectural Paint,
Building Boards, Flat Glass and Building Products Distributors.
Separating the industry into these component categories
allows us to look at the individual companies and products that
address both sides of the market, residential and commercial.
Some of the macroeconomic trends and market dynamics
Roofing, Siding &
Insulation
Materials
HVAC & Lighting
Windows & Doors
Surfaces
Plumbing
Hardware
Distributors
Source: TM Capital
www.tmcapital.com
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Market Demand Drivers
within the Building Products industry and its subsectors we will
explore include:
half of the year as spending on big-ticket home remodeling
projects increase (see Figure 5).
Increased Residential Construction – In 2013, private
residential construction spending continued its upward trend,
growing by 18.0% from $280.3 billion in 2012 to $330.7 billion
which represents a 38.5% increase over the 2010 trough level
of $238.8 billion (11.5% CAGR) (see Figure 1). As Figure 2
shows, U.S. housing starts reached 926,700 units, the highest
level since 2007, providing further evidence of a strong pickup
in residential construction. Although levels are still well below
the long-term annual average of 1.5 million annual starts,
economists are predicting a better year in 2014 with continued,
steady growth in 2015 and beyond.
Focused Consolidation through Strategic M&A – The
Building Products industry is highly fragmented and well
positioned for continued consolidation through mergers
and acquisitions. Global players in the industry are buying
brands, expanding their portfolio of products and entering new
markets; trends that are expected to continue. Since 2011,
there have been over 750 strategic acquisitions globally in the
building products space.
Robust Financial Sponsor-Driven M&A Activity – Many
financial sponsors with portfolio companies in the Building
Products space deferred going to market during 2013 in order
to realize earnings growth; a wave of private capital is now
looking to capitalize on the cyclical rebound in construction
throughout the residential and construction sectors. Since
2011, there have been over 250 financial sponsor investments
in or exits of U.S. and Canada based building products
companies.
Strengthening Private Residential Fixed Investment
– Private residential fixed investment, a measurement of
spending by private businesses, nonprofit institutions, and
households on fixed assets in the U.S. economy, has ticked
up modestly as a percentage of GDP from a 65 year low in
2011. This has been driven by residential construction and
home improvement spending throughout 2013 (see Figure
3). Looking forward, there is significant room for growth in
investment and all indications point to a continually improving
trend.
Residential Construction – In 2013, total U.S. private
residential construction spending grew 18.0% versus 2012 and
38.5% (11.5% CAGR) versus the trough in 2010. New single
family, multi-family and improvement spending increased
27.9%, 43.9% and 3.1%, respectively. The upward trend seen
since 2010 is a positive indicator for the industry, and we
expect spending and strong growth to continue in the second
half of 2014 and into 2015. Although growth is expected, a
slow start to 2014 may result in a delayed recovery. In March
2014, U.S. homebuilder confidence trended below forecast, a
result of continued poor weather and difficulty for homebuilders
in finding skilled labor and buildable lots. While the unusually
harsh weather has tempered the beginning of 2014, we believe
that this is a temporary pause and continue to expect builders
to see strong gains as warmer weather arrives.
Sector-Driven Non-Residential Construction – After hitting
a trough in 2011, private non-residential spending accelerated
in 2012, growing 15.6% from 2011, then flattened in 2013, with
strong growth experienced in lodging and a significant decline
in construction related to power generation. Consensus
construction estimates project that 2014 will grow in excess
of 5.0% as a result of the continued strengthening of the U.S.
economy and recovery in the non-residential construction
market.
Accelerating Remodels and Repairs – Remodeling and
repair activity is a direct driver of demand in the Building
Products market. In 2014, remodeling activity is expected to
surpass $140.0 billion with growth rates above 10% for the first
Figure 1: U.S. Private Residential Construction Spending
($ in billions)
$400
$350
$300
$250
$200
$150
$100
$50
$0
$350.3
$120.1
$44.3
$185.8
2008
Source: U.S. Census Bureau
www.tmcapital.com
$330.7
$245.9
$112.0
$238.8
$244.1
$111.6
$120.9
$28.5
$14.7
$15.0
$105.3
$112.6
$108.2
2009
New single family
2010
New multi-family
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2011
Improvements
$280.3
$126.0
$22.2
$132.0
2012
$129.9
$32.0
$168.8
2013
Figure 2: Average U.S Housing Starts
(in thousands)
2,500
2,000
1,569
1,602
1,705
1,848
1,957
2,068
1,801
1,355
1,500
906
1,000
554
587
609
2010
2011
781
927
500
0
2000
2001
2002
2003
Source: National Association of Home Builders
2004
2005
2006
Single-Family
Positive trends in housing starts create an improved macro
environment for Building Products companies operating in the
residential construction sector. Following a significant decline
from 2006 through 2009, U.S. residential housing starts began
to rebound modestly year-over-year in 2010 (6.0% growth)
and 2011 (3.7% growth) before accelerating in 2012 (28.1%
growth). Although housing starts remain well below the longterm annual average of 1.5 million units, in 2013 the U.S.
recorded 926,700 units, the highest level since 2007. While
many analysts originally predicted that 2013 starts would
eclipse the 1.0 million unit level, there were many factors
hampering demand in 2013. Consumer demand, driven by
rising mortgage rates, took the biggest bite out of new home
starts; the 30-year fixed mortgage rate increased by more
than 100bps, from 3.35% in May to 4.46% in December 2013.
Analysts are predicting mortgage rates to rise by at least onehalf of a percent in 2014 to the 5.0%-5.5% area. However,
predictions for rising rates have been proven false in Q1 as
weak employment, slow growth and market weakness have
kept rates in the mid-4.0% area. Even if these rates should
rise to the expected 5.0%-5.5% area, they would still remain
below the historical averages of 6.0%-8.0%. In addition to
mortgage rates, housing starts were also dragged down
2007
2008
2009
Multifamily
2012
2013
by debt-ceiling discussions in Washington, the two-week
government shutdown and concerns surrounding the Federal
Reserve’s bond buyback program.
Looking forward, several economists and analysts are
predicting a continued recovery and forecasting that housing
starts will eclipse the 1.0 million unit level in 2014. The
National Association of Home Builders (“NAHB”) predicts
steady growth with expectations of a full recovery in 2016. TM
Capital believes these positive trends signal the early stages
of a recovery in the Building Products sector, as accelerating
housing starts and remodeling lead to increased demand for
building products.
Private Residential Fixed Investment – Private residential
fixed investment includes the construction of new single-family
and multi-family homes, manufactured housing (or mobile
homes) and home improvements. As shown in Figure 3
below, private residential fixed investment has accounted for
an annual average of 4.7% of GDP since World War II, but
currently represents less than 3.0% of GDP, up slightly from
its 65 year low.
Figure 3: U.S. Private Residential Fixed Investment as a % of GDP
8%
6%
Average: 4.7%
4%
2%
65 year low: 2.2%
0%
1948
1953
1958
1963
1968
1973
1978
1983
Source:
Federal
Reserve
Economic
Data Data
Source:
Federal
Reserve
Economic
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1988
1993
1998
2003
2008
2013
Figure 4: U.S. Private Residential Fixed Investment (Quarterly Year-over-Year Change)
30.0%
20.0%
10.0%
0.0%
Jan-04
-10.0%
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
-20.0%
-30.0%
-40.0%
Source: Federal Reserve Economic Data
Source: Federal Reserve Economic Data
As shown in Figure 4, private residential fixed investment rose
substantially in 2013 with year-over-year growth by quarter
rising to over 20% for the first time since the second quarter of
2004. This growth has been fueled by new housing starts and
home improvement spending.
purchasing managers’ index. In 2014, the JCHS is expecting
the home remodeling market to experience strong growth
driven by increased spending.
Non-Residential Construction – Private non-residential
construction spending has been sector-driven over the past
several years, showing signs of a recovery, but remaining well
below historic peaks. Spending on non-residential construction
grew 15.6% in 2012, but declined modestly in 2013 primarily
due to an 18.7% decline in construction related to the electric
power industry (see Figure 6). In 2012, construction related
to electric power generation surged as a result of rebuilds
following a series of major natural disasters. The 2013 decline
was offset by construction in the lodging sector, which led
category growth at 28.7%. Going forward, construction in
the power and energy sectors should experience the largest
sustained turnaround. Construction for shale-related drilling
will continue to expand, increasing demand for pipelines, plants
and downstream facilities including tank farms, petrochemical
plants and export terminals.
Remodeling and Repairs – The Joint Center for Housing
Studies at Harvard University (“JCHS”) tracks the Leading
Indicator of Remodeling Activity (“LIRA”) on a Latest Twelve
Month (LTM) basis every quarter, as seen in Figure 5 below.
JCHS expects double-digit gains, on a moving four-quarter
average basis, for the first-half of 2014, before returning to just
below 10% by the third quarter.
The LIRA, measured as an annual rate-of-change of its
components, provides a short-term outlook of homeowner
remodeling activity and is intended to help identify future
turning points in the business cycle of the home improvement
industry. The LIRA model utilizes eight different economic
indicators to estimate near-term changes in the market: (i)
remodeling market index-future expectations, (ii) pending
home sales index, (iii) 30-year treasury bonds yield, (iv) single
family housing starts, (v) retail sales at building materials and
supplies dealers, (vi) manufacturers’ shipments of construction
materials, wood products and household appliances, (vii)
number of employees of residential remodelers and (viii) the
Commercial construction, a subsector of non-residential
construction, grew 8.8% in 2013. The growth in commercial
spending was primarily driven by warehouses and retail, which
experienced 22.8% and 8.0%, growth, respectively. As shown
in Figure 8, commercial construction spending remains well
Figure 5: Leading Indicator of Remodeling Activity (Year-over-Year Change)
($ in billions)
$160.0
20.0%
$140.0
15.0%
$120.0
10.0%
$100.0
5.0%
$80.0
—
$60.0
(5.0%)
$40.0
(10.0%)
$20.0
(15.0%)
$0.0
(20.0%)
LTM Home Improvement Activity
Source:
The
JointCenter
Center for
for Housing
Housing Studies
of of
Harvard
University
Source:
The
Joint
Studies
Harvard
University
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Y-O-Y Change
Figure 6: U.S. Private Non-Residential
Construction Spending
Figure 7: Architecture Billing Index –
Commercial / Industrial
($ in billions)
$450
$400
58
$408.6
55.2
$342.4
$350
$297.7
$300
$261.8
$250
$296.5
54
$257.5
55.0
53.8
51.9
54.8
53.0
$200
49.9
50.6
51.5
51.1
49.4
50
$150
49.7
51.0
50.6 50.5
50.2
$100
$50
$0
46
2008
2009
2010
2011
2012
2013
Source: U.S. Census Beureau
Source: The American Institute of Architects
below peak levels and has significant room for growth over the
next five to ten years. We expect the upward trend to continue
as demand grows for new U.S. projects.
Summary – From the words of the all-knowing Magic 8-ball,
“All Signs Point to Yes.” No matter which of the above indicators
one chooses to look at, the message is the same, recovery
is imminent. Growth in the Building Products market is not
dependent on an aggressive recovery to all-time highs; instead,
growth will come from a steady return to historical levels. We
expect to see continued growth across both the residential
and non-residential construction markets. Despite a slow
weather-driven start to 2014, economists continue to forecast
a strong finish to 2014. Recovery in the construction markets is
being driven by several overarching economic indicators. Job
growth, although sluggish, is still taking place. Interest rates
remain low compared to historical standards. The bank lending
environment is showing improvement with respect to lending
terms and volume of loans. Finally, the improving economy will
continue to positively impact consumer credit which has been
slowly returning to historical levels since it was significantly
impacted by the Credit Card Act of 2009 and the recession.
All of these factors will continue to contribute to growth and
investment activity in the building products market.
The American Institute of Architects (“AIA”) publishes an
Architecture Billing Index (“ABI”), which acts a proxy for private
building activity – scores above 50.0 represent an increase in
billings. The ABI, which serves as an economic indicator that
leads nonresidential construction activity by approximately
nine to twelve months, softened, but remained above 50.0
for the first four months of 2014. Figure 7, seen on the top
right of this page, shows the architecture billing index for the
commercial / industrial industry. The score of 50.2 for the
month of April is not reflective of the strong market and is likely
attributed to severe weather conditions that persisted into
the late winter months. Despite the softening since January,
there remains a pervading sense of optimism that business
conditions will improve as the year progresses.
Figure 8: U.S. Private Commercial Construction Spending
($ in millions)
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$82,653
$12,087
$5,640
$8,029
$8,227
$16,707
$30,000
$20,000
$6,300
$4,535
$4,868
$6,637
$36,505
$4,220
$3,546
$4,605
$5,987
$5,661
$9,730
$31,963
$10,000
$0
$50,460
$18,390
2008
Multi-retail
2009
Warehouse
Farm
$3,720
$4,270
$5,268
$43,162
$3,827
$4,843
$5,714
$6,951
$6,561
$46,932
$4,786
$4,551
$6,051
$6,932
$8,591
$6,543
$6,996
$12,486
$13,361
$14,831
$16,021
2010
2011
2012
2013E
Food / beverage
Source: U.S. Census Beureau
www.tmcapital.com
$39,723
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Automotive
Other Commercial
Market Landscape
Market Landscape
and expertise, which causes industry leaders to focus on high
demand markets (i.e. asphalt) and creates opportunities for
mid-sized and small players in lower demand markets (i.e.
elastomeric and bituminous).
The Building Products landscape is highly fragmented,
although there has been a marked trend towards consolidation
in recent years. In each category, companies primarily
compete based on brand recognition, quality, price, style,
customer relationships, ease of installation & maintenance and
service capabilities. Certain industries are more fragmented
than others - cabinetry, hardware, flooring & carpets, molding
& trim, and roofing & siding are still relatively fragmented,
primarily as a result of low barriers to entry and the ability
of smaller players to serve niche markets. In each of these
industries, a wide range of material/product alternatives
exists, often requiring different manufacturing technologies
and expertise. For example, many different materials can be
used in roofing applications, including asphalt, metal, plastic,
tile, elastomeric and bituminous, each with different price,
performance, durability and application characteristics. These
roofing alternatives require different manufacturing processes
On the other hand, countertop, insulation, architectural paint
and building boards are fairly consolidated. These industries
tend to rely more heavily on one or several material/product
alternatives, enabling large manufacturers to serve a greater
portion of the market. For example, fiberglass is the dominant
insulation material in the U.S. and can be costly to produce.
Therefore, manufacturers must realize a minimum scale
of production to achieve profitability. Similarly, laminates
comprise nearly 50% of the countertop market, enabling the
leading laminate manufacturers to command a substantial
share of the countertop market. An overview of the Building
Products landscape by major segment is shown below:
HVAC & Lighting
Plumbing & Hardware
Windows & Doors and
Cabinetry
Major Industry Participants
Est. Market
Size
Windows &
Doors
$21B
Cabinetry
$9B
Plumbing
$10B
Hardware (a)
$6B
HVAC
$12B
Lighting (b)
$10B
Level of
Fragmentation
Source: TM Capital
Notes:
(a)
(b)
Excludes Hardware products for Motor Vehicles, Furniture and Other Transport Equipment
Excludes Lighting for Vehicles & Machinery and Consumer & Commercial (table lamps, flashlights, etc.)
www.tmcapital.com
-6-
Barriers to
Entry
Market Landscape
Distributors
Materials
Roofing, Siding & Insulation
Surfaces
Major Industry Participants
Est. Market
Size
Countertops
$18B
Flooring &
Carpets
$20B
Molding &
Trim
$6B
Roofing
$20B
Siding
$7B
Insulation
$6B
Architectural
Paint
$10B
Building
Boards (c)
$7B
Flat Glass (d)
$3B
Distributors
NA
Level of
Fragmentation
Source: TM Capital
Notes:
(c)
(d)
Excludes Building Boards used in Furniture & Fixtures and Other Manufacturing
Excludes Flat Glass used in Motor Vehicle & Other Markets (mirrors, appliances, furniture, aerospace, etc.)
www.tmcapital.com
-7-
Barriers to
Entry
M&A Activity
M&A Activity
Historically, M&A activity within the Building
Products industry has been influenced by
trends in the residential / non-residential
construction and remodeling / repair markets
as well as by macroeconomic variables.
Transaction activity peaked in 2007, with
a record of 436 closed transactions in
the Building Products sector. In 2009,
activity tumbled to 236 closed transactions.
Activity picked up significantly post-2009
as the global economic environment began
to improve. In 2013, activity declined as
Building Products companies anticipated
strong earnings growth and decided to
defer going to market until they could
demonstrate improved earnings. Given
the industry growth in 2013, we expect
deal activity to increase significantly in
2014. Strategic and financial acquirers will
be looking to take advantage of industry
tailwinds and macroeconomic trends.
There continues to be a trend towards consolidation in
the Building Products space as major companies acquire
competitors and value-added brands solidify their market
positions. These acquisitive building products companies
have been focused on purchasing niche companies that have
developed a specific technological edge and/or a strong brand
name. Through an acquisition, the buyer is able to leverage
its established distribution networks and improve the sales and
margins of the acquired business.
in categories with macroeconomic tailwinds. The following
pages delve into consolidation that has occurred in the various
sub-sectors of the Building Products space as well as recent
acquisitions completed by private equity firms.
Market Consolidation Driven by M&A Activity – The
Building Products market is highly fragmented with a relatively
low concentration of market share. As a result of this
fragmentation, the Building Products market has undergone
significant consolidation over the past several years as
companies drive growth through mergers and acquisitions.
Acquisitive companies in the Building Products market are
Similarly, financial sponsors have significant dry powder and
are seeking to make acquisitions of companies operating
Figure 9: Number of Building Products M&A Transactions by Year
500
436
300
200
391
371
400
235
189
142
157
289
278
323
306
249
236
174
100
0
2000
2001
2002
2003
2004
2005
2006
Source:
IQ
Source:
CapitalCapital
IQ
www.tmcapital.com
-8-
2007
2008
2009
2010
2011
2012
2013
M&A Activity
using acquisitions as a method to expand geographically,
benefit from additional economies of scale, create additional
barriers to entry, consolidate customer bases and add new
brands and product lines to existing platforms. TM Capital
believes that consolidation within the Building Products market
will continue as the construction, remodel and repair markets
improve and as consumer sentiment and the overall economy
continues to strengthen.
The following charts show a select group of Business Products
consolidators that have been acquisitive within the sector over
the past several years.
Windows, Doors & Cabinetry
Core Brand /
Acquirer
Acquired Brands / Companies (Year Acquired)
2014
2013
2012
2012
2012
2012
2011
2010
2010
2010
2013
2013
2013
Plumbing & Hardware
Core Brand /
Acquirer
Subsidiary of Lixil Corp.
2010
2010
2013
2012
2013
2012
2013
2012
Pending
Pending
2013
Source: TM Capital
www.tmcapital.com
-9-
2008
2008
2012
2010
2011
2013
2013
2013
2012
M&A Activity
HVAC & Lighting
Core Brand /
Acquirer
2011
2012
2013
2012
2011
2011
2011
2011
2010
2010
Surfaces
Core Brand /
Acquirer
2013
Decorative Surfaces Business
2012
*
Belgian Resins Business
Pending
2013
2013
2013
2010
2012
*
2012
2011
Pending
2010
2010
2009
2009
2012
2011
Pending
2008
2007
Materials
Core Brand /
Acquirer
Pending
2013
Source: TM Capital
www.tmcapital.com
- 10 -
2006
M&A Activity
M&A Activity by Financial Sponsors – Financial sponsors
sense that the Building Products market has strong growth
dynamics, and are beginning to deploy capital into the sector.
The charts below highlight investments and exits since
January 2012 in which a private equity firm acquired a U.S.
based Building Products company.
Figure 10: Acquisitions of North American Building Products Companies by Private Equity Firms (2012 – Present)
($ in millions)
Date
Closed
4/1/2014
Target
Acquiror
Target Description
Deal Size
Target
Revenue
$770.0
NA
Gypsum Management and
Supply
AEA Investors
Distributor of drywall, acoustical and other specialty building
materials
3/31/2014
Jones Lumber Company
BlackEagle Partners, Building Industry
Partners, US LBM Holdings
Supplier of lumber and building materials to the South Florida and
Caribbean markets
NA
NA
3/10/2014
Hartland Controls
Incline Equity Partners
Provider of electrical system components. The company
manufactures products such as pole contractor, transformers,
capacitors and auxiliary switches
NA
NA
3/17/2014
Koroseal Interior Products
Peak Rock Capital
Manufacturer and distributor of custom interior products including:
commercial wall coverings, wall protection systems and dryeraseable wall coverings
NA
NA
2/14/2014
Novik
Clearview Capital
Manufacturer and provider of polymer siding and roofing materials.
The company designs, manufactures, sells and installs polymer
home-exterior products
$41.8
$27.5
2/5/2014
E.B. Bradley Company
PSP Capital Partners
Distributor of specialty hardware, surfacing products, flooring and
woodworking supplies and manufacturer of laminated panels
NA
NA
2/5/2014
Scott Group Custom
Carpet
Keystone Capital
NA
NA
1/23/2014
Alleyton Resource
$184.3
NA
1/23/2014
Jones Heartz Drywall
Supply
Innovation Works, Silverhawk Capital
Partners, Summit Materials, The
Blackstone Group
Building Industry Partners, Kodiak
Building Partners
Manufacturer of custom wool carpets for architects and designers.
The company designs and manufactures machine and hand made
custom wool carpets and rug
Manufacturer and wholesaler of concrete and building products
Provider of construction products and material including welding
accessories, lumber and insulation products.
$5.0
NA
1/23/2014
The Faucet Queens
Howard Berger Company, Littlejohn &
Company
Provider of home hardware products to the food and drug retail
markets
NA
NA
1/21/2014
Alliance Steel
Associated Steel Group, Promus Equity
Partners
Manufacturer of metal and related components for the construction
industry. The company's products include frame structures, panel
structures and other components used in construction
NA
NA
1/14/2014
Dimex
Grey Mountain Partners
Manufacturer of extruded plastic products. The company provides
plastic products for lawn and gardening, commercial matting,
edging and control joint building products
NA
NA
Rockland Industrial
Products
Lubar & Co
Manufacturer of laminated wood flooring
NA
NA
12/31/2013
Sound Seal
Hamilton Robinson Capital Partners
Manufacturer of commercial and architectural acoustic noise control
products
$27.0
$18.1
12/19/2013
High Standard
Nudo Products, RFE Investment
Partners
NA
NA
12/17/2013
Janus International
Saw Mill Capital
Manufacturer and distributor of architectural insulated and veneer
panels. The company offers panel systems, including insulated and
veneer metal panels and aluminum composite panels.
Manufacturer of rolling doors and building components.
NA
NA
12/11/2013
Arbors Direct
Graham Partners, HB&G Building
Products
NA
NA
12/10/2013
Musselman Lumber
Manufacturer of custom sized fiberglass arbor and pergola kits. The
company offers its products for residential and commercial
applications
Manufacturer and distributor of lumber and building materials. The
company engages in the supply of lumber, engineered wood
products, trusses, windows, doors, siding, roofing, pre-built stairs
and pre-hung doors
NA
NA
11/27/2013
California Products
Delos Capital, Satori Capital
Manufacturer of paints, coatings and sports surfacing systems. The
company provides architectural coatings, house paint and stains,
industrial maintenance coatings and surface preparation products
NA
NA
11/26/2013
Roman Decorating
Products
Blue & Gray Enterprises, Salt Creek
Capital
Manufacturer and distributor of adhesives, primers, strippers and
related items used in the application of wall coverings to
professional contractors
NA
NA
11/26/2013
SCI Floor Covering
Corridor Capital
Distributor and installer of commercial and residential floor covering
products
NA
NA
InterWrap
Quad-C Management
Manufacturer of laminated textiles. The company is a vertically
integrated, global manufacturer of coated woven products and
diverse multi-layer laminated reinforced plastic substrates
NA
NA
11/1/2013
Demilec
Sun Capital Partners
Developer and distributor of spray foam insulation material
NA
NA
11/1/2013
Home Acres Building
Supply
CI Capital Partners, Foundation Building
Materials LLC
Provider of building materials to residential and commercial
contractors. The company offers drywall, steel framing, commercial
and residential insulation products, gypsum wallboard and other
NA
NA
1/1/2014
Source: PitchBook
11/14/2013
www.tmcapital.com
- 11 -
12/17/2013
Janus International
Saw Mill Capital
NA
NA
12/11/2013
Arbors Direct
Products
NA
NA
12/10/2013
Musselman Lumber
applications
and pre-hung doors
NA
NA
industrial maintenance coatings
and surface preparation products
Target Description
NA
NA
Deal Size
Target
Revenue
NA
$770.0
NA
NA
M&A Activity
Figure 10: Acquisitions of North American Building Products Companies by Private Equity Firms (2012 – Present)
11/27/2013
($ in millions)
Date
Closed
California Products
Target
Acquiror
11/26/2013
4/1/2014
Roman
GypsumDecorating
Management and
Products
Supply
Blue
Gray Enterprises, Salt Creek
AEA &
Investors
Capital
Manufacturer
and distributor
of adhesives,
primers, strippers
Distributor of drywall,
acoustical
and other specialty
building and
related
items used in the application of wall coverings to
materials
3/31/2014
11/26/2013
Jones
Lumber
Company
SCI
Floor
Covering
BlackEagle
Partners, Building Industry
Corridor Capital
Supplier of and
lumber
and building
materials
the Southfloor
Florida
and
Distributor
installer
of commercial
andtoresidential
covering
Caribbean markets
products
NA
NA
3/26/2014
11/14/2013
American Hardwood
InterWrap
Industries
Baillie
Lumber
Quad-C
Management
Manufacturer of laminated
lumber products
using
variety ofishardwoods.
textiles.
The acompany
a vertically Its
products are
usedmanufacturer
primarily in the
market,
including
integrated,
global
of remodeling
coated woven
products
and
flooring,multi-layer
custom cabinetry,
furniture
and plastic
molding
diverse
laminated
reinforced
substrates
NA
NA
11/1/2013
3/10/2014
Demilec
Hartland Controls
Sun
Capital
Incline
EquityPartners
Partners
NA
NA
NA
NA
11/1/2013
3/17/2014
Home Acres Building
Supply
Peak Rock
Capital
Materials
LLC
Developer
distributor
of spray
foam insulation
material
Provider ofand
electrical
system
components.
The company
ManufacturerThe
andcompany
distributor
of custom
interior
productscommercial
including:
contractors.
offers
drywall,
steel framing,
commercial
wallinsulation
coverings,
wall protection
and
dryand
residential
products,
gypsumsystems
wallboard
and
other
eraseable
wall coverings
related
interior
products
NA
NA
NA
NA
2/14/2014
11/1/2013
Novik Door
Mesker
Clearview
Capital
Harvey
& Company
provider
of polymer
and
roofing
materials.
Manufacturer and seller
of hollow
metalsiding
doors,
frames
and
The company
designs, manufactures, sells and installs polymer
hardware
components
$41.8
NA
$27.5
NA
Royal
Baths Manufacturing
E.B. Bradley
Company
Cotton
CreekPartners
Capital Management
PSP Capital
Designer
manufacturer
of cultured
marble
bathroom
products
Distributorand
of specialty
hardware,
surfacing
products,
flooring
and
in
the United States.
woodworking
supplies and manufacturer of laminated panels
NA
NA
NA
NA
10/7/2013
2/5/2014
Ridgeline
Pipe
Scott Group
Custom
Manufacturing
Carpet
Atkore
International,
Clayton Dubilier &
Keystone
Capital
Rice
NA
NA
NA
NA
10/3/2013
1/23/2014
Crockett
County Mining
Alleyton Resource
Permian
Basin
Materials,
W.L.Capital
Ross &
Innovation
Works,
Silverhawk
Co
NA
$184.3
NA
NA
10/3/2013
1/23/2014
Highland
Concrete
Jones Heartz
Drywall
Supply
Blackstone Group
Permian
Basin Materials,
Ross &
Building Industry
Partners,W.L.
Kodiak
Co
Building Partners
Manufacturer
seller of
PVC
pipe and
fittings
Manufacturer and
of custom
wool
carpets
for architects
and designers.
Producer
of sand
gravel and
limestone
products
in
Manufacturer
and and
wholesaler
of concrete
and
buildingused
products
construction of housing, commercial and industrial facilities and
buildings
Provider
mix concrete,
flatwork,
walls, including
curb and welding
gutter,
Provider of
of ready
construction
products
and material
interior
floor coatings
andinsulation
concrete products.
repairs
accessories,
lumber and
NA
$5.0
NA
NA
10/3/2013
1/23/2014
Tedd
Wood Queens
The Faucet
Executive
Cabinetry,
Gridiron
Capital&
Howard Berger
Company,
Littlejohn
Company
Manufacturer
of cabinets.
company
manufactures
custom
Provider of home
hardwareThe
products
to the
food and drug
retailand
semi-custom
cabinets
markets
NA
NA
NA
NA
10/3/2013
1/21/2014
Wallach
Concrete
Alliance Steel
Permian
Basin
Materials,
W.L. Ross
&
Associated
Steel
Group, Promus
Equity
Co
Partners
Provider
of ready-mix
The
company provides
ready mix
Manufacturer
of metalconcrete.
and related
components
for the construction
concrete,
sand
and gravelproducts
and limestone
industry. The
company's
includeproducts
frame structures, panel
NA
NA
NA
NA
10/1/2013
CPG International
$1,500.0
NA
1/14/2014
Dimex
Ares Private Equity Group, Ontario
Teachers'
Pension
Plan
Grey Mountain
Partners
NA
NA
9/30/2013
1/1/2014
NA
NA
NA
NA
NA
$18.1
$700.0
NA
$311.4
NA
8/1/2013
12/17/2013
Triple M Housing
Janus International
Provider of home-improvement and hardware products
products
Manufacturer of plasterboard and other gypsum based products for
construction,
and of
interior
decoration
Manufacturer renovation
and distributor
architectural
insulated and veneer
veneer
metal
panels
and
aluminum
composite
Manufacturer of factory built housing products.panels.
The company
provides
modular
housing,
manufactured
resort cottages
Manufacturer
of rolling
doors
and buildinghomes,
components.
for urban markets, meridian resort cottages and work site offices
$214.0
$27.0
8/30/2013
12/19/2013
Simplex Strip Doors
Rockland Industrial
Products
Newell Rubbermaid
(Hardware
Sound SealGroup
Business)
Continental Building
Products
(CBPX)
High Standard
NA
NA
NA
NA
8/1/2013
12/11/2013
Wolverine Brass
Arbors Direct
Dunes Point Capital, Franklin Square
GrahamPartners
Partners, HB&G Building
Capital
Products
NA
NA
NA
NA
7/31/2013
12/10/2013
ADCO Global
Musselman Lumber
Arsenal Capital Partners, Royal
BlackEagleand
Partners,
Building Industry
Adhesives
Sealants
NA
NA
NA
NA
7/31/2013
Wallboard & Supply
Company
California Products
Materials LLC
NA
NA
Tru-Wood Cabinet
Building Industry Partners, United
Cabinet Holdings
11/26/2013
7/26/2013
Roman Decorating
Aldora
Glass Holdings
Products
Superior
Capital Capital Partners
The company provides residential and commercial faucets, faucet
Manufacturer
of custom
sizedand
fiberglass
arborpressure
and pergola
kits. The
and
bath accessories,
valves
hydronics,
and brass
company
offers
products for residential and commercial
fittings,
tools
anditschemicals
applications
Designer, manufacturer and distributor of adhesive and sealant
Manufacturer
and distributor
of lumber
and building
products
for transportation
and
construction
marketsmaterials. The
Manufacturer and wholesaler of building materials. The company
and pre-hung doors
offers wall boards, joint compounds and products related to drywall,
Manufacturer
paints, coatings
and sports
surfacing systems. The
metal
framing,ofacoustical
and synthetic
stucco
Manufacturer of cabinetry for the kitchen, bath and home. The
company provides stock and semi-custom cabinets, cabinet
accessories, doors and garage organizers for storage needs
Manufacturer
of tempered
glass and of
aluminum
products
related items used
in the application
wall coverings
to
11/26/2013
7/26/2013
SCI Floor Covering
Coastal Glass Distributors
Corridor Capital
Superior Capital Partners
11/14/2013
6/12/2013
InterWrap
New England Building
Supply
11/1/2013
10/15/2013
2/5/2014
9/11/2013
12/31/2013
BCL Pittsburgh, Harvey & Company,
ShoreView
Lubar & CoIndustries, TMI
HarbourVest Partners, Landmark
Partners,
Nova Capital
Management
Hamilton Robinson
Capital
Partners
Lone Star Funds
Partners
TriWest Capital Partners
Saw Mill Capital
Manufacturer and provider of building products. The company
manufactures
extruded
polyethylene,
polypropylene
and PVC
or
Manufacturer of
extruded
plastic products.
The company
provides
CPVC
sheet
products
usedcommercial
primarily asmatting,
metal and
plastic thermoplastic
products for lawn
and
gardening,
wood
edgingsubstitutes
and control joint building products
Manufacturer of PVC based curtains and products
NA
NA
NA
NA
NA
NA
NA
NA
Fabricator and distributor of glass products. The company offers
products
laminated, tempered and insulated glass
NA
NA
NA
NA
Quad-C Management
Building Partners
Manufacturer of construction products and material including
welding accessories, lumber and insulation products
NA
NA
NA
NA
Demilec
Sun Capital
Golden
GatePartners
Capital
Developer
distributor
ofcovering
spray foam
insulation material
Provider
ofand
custom
window
products
NA
NA
NA
NA
11/1/2013
4/25/2013
Home Acres
Building
Midwest
Sales
Provider of
of industrial,
building materials
to residential
and residential
commercialand
Provider
mechanical,
commercial,
NA
NA
NA
NA
4/22/2013
Shelly Enterprises
CI Capital
Partners,
Foundation
Building,
Audax
Group,
Distribution
International
Materials
LLC Capital, Supply Chain
PNC
Mezzanine
Equity Partners, The CapStreet Group
related interior products
Provider of lumber, hardware, building materials and manufactured
components
NA
NA
11/27/2013
7/30/2013
6/4/2013
Springs Window Fashions
Source:
PitchBook
Supply
www.tmcapital.com
contractors.
The company offers drywall, steel framing, commercial
- building
12 - insulation
7/30/2013
Company
Materials LLC
offers wall boards, joint compounds and products related to drywall,
metal framing, acoustical and synthetic stucco
Tru-Wood Cabinet
Building Industry Partners, United
Cabinet Holdings
Manufacturer of cabinetry for the kitchen, bath and home. The
company provides stock and semi-custom cabinets, cabinet
accessories, doors and garage organizers for storage needs
NA
Manufacturer of tempered glass and aluminum products
NA
7/26/2013
Aldora Glass Holdings
NA
M&A Activity
NA
7/26/2013
Coastal Glass Distributors
Fabricator and distributor of glass products. The company offers
NA
NA
Figure
10:
Acquisitions of North
American Building Products
Companies by Private Equity Firms (2012
– Present)
laminated, tempered and insulated glass
($ in millions)
6/12/2013
Date
Closed
New England Building
Supply
Target
Building PartnersAcquiror
Manufacturer of construction products and material including
welding accessories, lumber
and
insulation products
Target
Description
Springs
Fashions
GypsumWindow
Management
and
Supply
Golden
Gate Capital
AEA Investors
Provider
ofof
custom
window
covering
products
Distributor
drywall,
acoustical
and other
specialty building
materials
4/25/2013
3/31/2014
Midwest
Sales Company
Jones Lumber
4/22/2013
3/26/2014
Shelly
Enterprises
American
Hardwood
Industries
Audax
Group,
Distribution
International
BlackEagle
Partners,
Building
Industry ,
PNC
Mezzanine
Capital,
Supply Chain
Partners,
US LBM
Holdings
Equity Partners, The CapStreet Group
BlackEagle
Partners, Building Industry
Baillie Lumber
4/9/2013
3/10/2014
Gienow Windows & Doors
Hartland Controls
CI Capital Partners, Ply Gem Industries
Incline Equity Partners
4/3/2013
3/17/2014
NRG Equipment
Lynx Equity
Peak Rock Capital
4/2/2013
BMF
Audax Group, Elgin Fasteners
2/14/2014
Novik
Clearview Capital
Westroc
PSP CapitalGroup
Partners
Blackstone
6/4/2013
4/1/2014
4/2/2013
2/5/2014
3/15/2013
2/5/2014
3/1/2013
Signature Systems
Scott Group Custom
Carpet
Shnier-Gesco
1/23/2014
Alleyton Resource
2/28/2013
SRS Distribution
1/23/2014
Supply
New North Trim
2/15/2013
1/23/2014
The Faucet Queens
1/22/2013
MI Windows and Doors
1/21/2014
1/7/2013
Alliance Steel
Masco Framing
Babson Capital Management, Individual
Investor, Linsalata Capital Partners
Keystone Capital
Blue Point Capital Partners
Berkshire Partners
Blackstone Group
Building Partners
Sunrise Windows, The Riverside
Company
Company
Harvey & Company, ShoreView
Industries
Partners
Atlas Holdings
Deal Size
NA
Target
Revenue
NA
$770.0
NA
Provider
industrial,
commercial,
andand
Supplier of lumber
andmechanical,
building materials
to the residential
South Florida
building
insulation
Caribbean
markets
NA
NA
Provider
of lumber,
hardware,
building
manufactured
Manufacturer
of lumber
products
usingmaterials
a variety and
of hardwoods.
Its
components
products are used primarily in the remodeling market, including
flooring, custom cabinetry, furniture and molding
Manufacturer of windows and doors for the residential and
commercial construction markets
Provider of HVAC products suitable for various new construction
Manufacturer
distributor of custom interior products including:
and
renovationand
applications
commercial wall coverings, wall protection systems and dryeraseable wallofcoverings
Manufacturer
fasteners, bolts, nuts, studs and socket caps
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Provider
of aggregates
home-exterior
products and ready-mix concrete
$41.8
$27.5
NA
NA
Distributor of specialty hardware, surfacing products, flooring and
Designer & Marketer of temporary flooring and fencing systems
Provider of floor covering. The company offers flooring products,
carpets and rugs.
Provider of roofing products for residential and commercial
applications
Designer and manufacturer of window-related products
markets
Manufacturer of windows and doors
industry. The company's products include frame structures, panel
Provider of installation and craftsmanship in areas of residential
framing, exterior & interior doors, trim and finish carpentry
NA
NA
NA
NA
NA
NA
NA
NA
NA
$184.3
NA
$645.0
NA
$5.0
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1/14/2014
1/7/2013
Dimex
Western States Glass
Sun Capital Partners, Trulite Glass &
Aluminum Solutions
Manufacturer of extruded plastic products. The company provides
Provider, distributor and fabricator of glass products for buildings
NA
NA
NA
NA
12/31/2012
1/1/2014
Total
Building
Services
Rockland
Industrial
Group
(Certain Assets)
Products
Stock
Lubar Building
& Co Supply, The Gores Group
Provider
of prefabricated
supplies, floor and roof trusses,
Manufacturer
of laminatedbuilding
wood flooring
wood wall panel systems and siding and porch turnkey services
NA
NA
NA
NA
12/28/2012
12/31/2013
Clad-Rex
Sound Seal
Bounds
Partners
HamiltonEquity
Robinson
Capital Partners
Manufacturer
clad steel
The acoustic
companynoise
produces
Manufacturer of
of vinyl
commercial
andproducts.
architectural
control
vinyl
coated, prepainted, powder and other coatings steel and
products
aluminum sheets and resquared blanks
NA
$27.0
NA
$18.1
12/28/2012
12/19/2013
H&H
Lumber
High Standard
BlackEagle
Partners,
Building Industry
Nudo Products,
RFE Investment
Partners,
Partners US LBM Holdings
NA
NA
12/17/2013
12/20/2012
Janus International
Cleaver
Brooks
Saw Mill Group
Capital
Harbour
The
company and
provides
variety
building products
to complete
new
Manufacturer
distributor
ofofarchitectural
insulated
and veneer
construction,
additions,offers
remodeling,
windowsincluding
and doors,
roofing,and
panels. The company
panel systems,
insulated
garages
and decking
veneer metal
panels and aluminum composite panels.
Manufacturer
of rolling doors
and building
components.
Designer,
manufacturer,
distributor
and seller
of boiler room
NA
NA
NA
NA
12/11/2013
12/20/2012
Arbors Direct
G-O-N
Capital Southwest, RectorSeal
Products
NA
NA
NA
NA
12/10/2013
12/17/2012
Musselman Lumber
Cascade Windows
Altamont
Partners
Partners, Capital
US LBM
Holdings
NA
NA
NA
NA
12/14/2012
11/27/2013
ATI Black Diamond
California Products
Granules
Merit Capital Partners, U.S. Minerals
$9.6
NA
NA
NA
Custom Window Systems
Highlander Partners
NA
NA
Roman Decorating
Products
F.W. Honerkamp
Capital
Leading Ridge Capital Partners, Rugby
Architectural Building Products
Corridor Capital
12/7/2012
11/26/2013
11/28/2012
11/26/2013
SCI Floor Covering
11/15/2012
Titan Construction
Products (Certain Assets)
InterWrap
11/14/2013
11/1/2012
11/1/2013
Solar Seal
Demilec
Source: PitchBook
10/31/2012
11/1/2013
ACProducts
Home Acres Building
Supply
Wilsonart International
Holding
American Industrial Partners
Materials LLC
Clayton Dubilier & Rice
TimberTech
AEA Investors, CPG International,
www.tmcapital.com
10/31/2012
9/30/2012
AlpInvest Partners, Anchorage Capital
Group, Contech Engineered Solutions,
Quad-C Management
Farallon
Capital, Littlejohn & Company,
Tennenbaum Capital Partners
Consolidated Glass Holdings, Grey
Mountain
Partners
Sun Capital
Partners
products and systems for commercial, industrial, and institutional
applications
Developer and manufacturer of the only glue on downspout nozzle.
The company originated and patented a glue on nickel-bronze
applications
downspout for commercial building roof drains
The
company
manufactures
a complete
lineengineered
of custom wood
vinyl
company
engages
in the supply
of lumber,
windows
patio windows,
doors for doors,
virtuallysiding,
any application
products,and
trusses,
roofing, pre-built stairs
and pre-hung doors
Manufacturer and provider of roofing shingle granules and
sandblasting abrasives
Manufacturer of vinyl and aluminum window and door products
The company provides furniture building material, adhesives,
hardware material, plywood and composite materials
products
The
company provides corrugated metal pipe products, machinery,
equipment and inventory for construction
diverse multi-layer
laminated
reinforced plastic
substrates
Manufacturer
of fabricated
architectural
glass products
Manufacturer of cabinets and storage accessories, including
kitchen
and decorative
embellishments
Providerorganizers,
of building mounting
materials kits
to residential
and commercial
contractors. The company offers drywall, steel framing, commercial
and residentialand
insulation
products,
gypsum
wallboard
and
other
Manufacturer
provider
of laminate
and work
surface
products
related
interior products
for
the construction
market
- 13 -
Provider of decking, railing and fencing solutions. The company
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$27.0
NA
$136.0
NA
$1,050.0
$1,100.0
$320.0
NA
windows and patio doors for virtually any application
12/14/2012
ATI Black Diamond
Granules
Merit Capital Partners, U.S. Minerals
Custom WindowIndustry
Systems
Highlander
Partners
12/7/2012 Products
Building
Spotlight
11/28/2012
Manufacturer and provider of roofing shingle granules and
sandblasting abrasives
$9.6
NA
NA
M&A Activity
Manufacturer of vinyl and aluminum window and door products
NA
F.W. Honerkamp
The company provides furniture building material, adhesives,
NA
NA
Titan Construction
Products (Certain Assets)
AlpInvest Partners, Anchorage Capital
Group, Contech Engineered Solutions,
Farallon Capital,Acquiror
Littlejohn & Company,
Tennenbaum Capital Partners
Consolidated
AEA InvestorsGlass Holdings, Grey
Mountain Partners
The company provides corrugated metal pipe products, machinery,
equipment and inventory for construction
NA
NA
Target Description
Deal Size
Target
Revenue
Manufacturer
of fabricated
architectural
glass
products
Distributor of drywall,
acoustical
and other
specialty
building
materials
NA
$770.0
NA
NA
hardware material, plywood and composite materials
Figure 10: Acquisitions of North
American Building Products
Companies by Private Equity Firms (2012 – Present)
11/15/2012
($ in millions)
Date
Closed
11/1/2012
4/1/2014
Target
Solar
Seal
Gypsum
Management and
Supply
10/31/2012
3/31/2014
ACProducts
Jones Lumber Company
American
Industrial
Partners
BlackEagle
Partners,
Building Industry
Manufacturer
of cabinets
and storage
accessories,
including
Supplier of lumber
and building
materials
to the South
Florida and
kitchen
organizers,
Caribbean
markets mounting kits and decorative embellishments
$27.0
NA
$136.0
NA
10/31/2012
3/26/2014
Wilsonart
American International
Hardwood
Holding
Industries
Clayton
Dubilier & Rice
Baillie Lumber
Manufacturer
provider
of laminate
work of
surface
products
Manufacturer and
of lumber
products
usingand
a variety
hardwoods.
Its
for
the construction
market in the remodeling market, including
products
are used primarily
$1,050.0
NA
$1,100.0
NA
9/30/2012
3/10/2014
TimberTech
Hartland Controls
$320.0
NA
NA
NA
9/28/2012
Tandus US
NA
$0.3
3/17/2014
AEA Investors, CPG International,
Incline Equity
Partners
Pamlico
Capital,
Private Equity Capital
Corporation
Kohlberg Kravis Roberts, Sommer
Allibert,
Tarkett
Peak Rock
Capital
NA
NA
9/10/2012
Greco Aluminum Railings
2/14/2014
Novik
O2 Investment Partners, Penn
Mezzanine
Clearview Capital
8/31/2012
Insulpane of Connecticut
and Orchard Glass
Distributors
Mountain Partners
8/27/2012
ACI Building Systems
2/5/2014
Scott Group Custom
Carpet Prince Street
Bentley
Partners
Keystone Capital
2/5/2014
8/17/2012
1/23/2014
8/3/2012
1/23/2014
8/1/2012
1/23/2014
Alleyton Resource
Stanton Carpet
Supply
Inter
Continental
Hardwoods
The Faucet Queens
Dominus Capital
Partners,Equity
Summit
Materials,
The
Norwest
Partners,
Norwest
Blackstone Partners
Group
Mezzanine
Building Partners
American
Industrial Partners
Company
Centerbridge
Partners, Masonite
8/1/2012
Lemieux Doors
1/21/2014
Alliance Steel
7/31/2012
Drew Foam
1/14/2014
7/17/2012
Dimex
Coveright
Surfaces (North
American Operations)
Grey Mountain
Partners Pension Plan
Arclin,
Ontario Teachers'
6/30/2012
1/1/2014
Wilson Block Company
Rockland Industrial
Products
Oberfields, The Anderson Group
Lubar & Co
6/11/2012
12/31/2013
Laurel Aggregates
Sound Seal
6/6/2012
12/19/2013
Wellnitz
High Standard
CorEnergy Infrastructure Trust, Kayne
Hamilton Robinson
Capital Partners
Anderson
Energy Development,
Trilantic
Capital Partners, VantaCore Partners
Oberfields, The Anderson Group
Partners
5/31/2012
12/17/2013
Roofing Supply Group
Janus International
Clayton Dubilier & Rice
Saw Mill Capital
5/17/2012
12/11/2013
Camino Modular Systems
Arbors Direct
Cornerstone Capital Partners, RFE
Graham Partners,
HB&G Building
Investment
Partners
Products
5/16/2012
12/10/2013
Flanders (FLDR)
Musselman Lumber
FS Investment, Insight Equity
Thorpe Specialty Services
Audax Group, Distribution International
11/27/2013
5/2/2012
California Products
Metl-Span
Clayton Dubilier & Rice, NCI Building
Systems
11/26/2013
4/21/2012
Roman Decorating
AJ Brauer Stone
Products
RAF Industries
Capital
11/26/2013
4/18/2012
SCI Floor Covering
Climatec Building
Technologies Group
Corridor Capital
Pegasus Capital Advisors
11/14/2013
4/10/2012
InterWrap
Lee Brass
Quad-C Management
The Reserve Group
5/3/2012
International, Oaktree Capital
Management
Partners
The
Gladstone Companies
Source: PitchBook
11/1/2013
4/9/2012
Demilec
Prime
Hardwoods
Sun Capital
Cedar
CreekPartners
Wholesale Lumber,
Charlesbank Capital Partners
11/1/2013
3/26/2012
Home AcresDoors
Building
Baillargeon
3/12/2012
Lumber Products (Las
Vegas Distribution
CI Capital Partners,
Foundation
Centerbridge
Partners,
MasoniteBuilding
Materials LLCOaktree Capital
International,
Management
Supply
www.tmcapital.com
Provider of decking, railing and fencing solutions. The company
Provider
of electrical
system
components.
The company
offers
composite
decking,
PVC
decking, composite
fencing, deck
manufactures
products such as pole contractor, transformers,
railing
and lighting
capacitors
and
auxiliary
switches
Provider of floor covering services. The company manufactures
three
brands of
carpet
Manufacturer
and
distributor of custom interior products including:
commercial wall coverings, wall protection systems and dryManufacturer
provider of welded aluminum balcony railing
eraseable walland
coverings
systems
Distributor of flat glass, mirrors and shower doors. The company
also distributes architectural glass with services including cutting,
Distributor of
specialtyand
hardware,
surfacing products, flooring and
tempering,
laminating
insulating
woodworking supplies
and
manufacturer
laminatedroofing
panels
Manufacturer
of custom
engineered
metalofbuildings,
systems and components for the non-residential construction
industry
The company of
designs
and manufactures
made
Manufacturer
broadloom
and carpet tilemachine
productsand
for hand
commercial
custom
wool carpets
and rug
and
residential
interiors
Designer, manufacturer and importer of decorative carpets and
custom rugs for the residential and commercial markets
accessories,
lumber and
insulation
products.
Supplier
of wholesale
hardwood.
The
company offers hardwood
flooring and decking and traditional hardwoods in a variety of
Provider ofand
home
hardware products to the food and drug retail
thickness
grades
markets
Manufacturer
of doors. The company offers indoor and outdoor
French doors in various type of wood like ash, cherry, hemlock,
Manufacturer
of and
metal
and more
related components for the construction
pine,
white pine
many
industry. The company's
include
frameinstructures,
Manufacturer
of specialtyproducts
foams used
primarily
packagingpanel
and
structures
and other components used in construction
building
applications
NA
NA
$41.8
$27.5
NA
NA
NA
NA
NA
NA
NA
NA
$35.0
NA
$184.3
NA
NA
NA
$5.0
NA
$10.0
NA
NA
NA
NA
NA
NA
NA
$21.3
NA
NA
NA
NA
NA
NA
NA
Producer of limestone aggregate products. The company provides
Manufacturermaterials
of commercial
and
architectural
acoustic
control
construction
such as
stone
slinger and
stonesnoise
with varied
products
specifications
Producer of concrete block and masonry products
veneer metal
panels andand
aluminum
composite
Distributor
of residential
commercial
roofingpanels.
products and
Manufacturer
of rolling doors and building components.
related
materials
NA
$27.0
NA
$18.1
NA
NA
NA
NA
NA
NA
NA
NA
Manufacturer and distributor of access flooring, modular wiring and
Manufacturer
of custom sized
fiberglass arbor and pergola kits. The
underfloor
air distribution
products
applications
Manufacturer of air filters, air handling and containment systems
products,oftrusses,
windows,
doors,
siding,and
roofing,
Provider
industrial
insulation,
refractory
acid pre-built
masonrystairs
and pre-hung doors
products
NA
NA
NA
NA
$192.0
NA
NA
NA
NA
NA
NA
$145.0
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Provider of brass casting products to plumbing industry
NA
NA
NA
NA
Developer
distributor of
spray foam
insulation
material
Provider
of and
of hardwoods,
hardwood
specialty
products
and
premium lumber
NA
NA
NA
NA
Provider of building
materials
to residential and
commercial
Manufacturer
and provider
of architectural,
institutional,
fire and
NA
NA
NA
$20.0
Producer of doors and hardwood moulding operations
NA
NA
Manufacturer
of extruded
plastic
products.flooring
The company
provides
Provider
of surface
materials
for furniture,
and building
industries
Manufacturer of blocks and pavers building products
company of
provides
architectural
coatings,
house paint
and stains,
Producer
insulated
metal panels
for commercial,
industrial
and
industrial
maintenance
coatings
products
cold
storage
buildings, as
well asand
roofsurface
panels,preparation
architectural
panels
and commercial panelling technology
The company also provides flagstone, field stone, landscape
products, marble, tiles and chopped white rock and cut stone for
home, patio and pools
Provider of industrial and large commercial heating, ventilation and
products
air conditioning equipment
contractors.
The company
- commercial
14 - wood
doors offers drywall, steel framing, commercial
5/3/2012
Thorpe Specialty Services
Audax Group, Distribution International
Metl-Span
Dubilier & Rice, NCI Building
5/2/2012 Products
Building
Industry Clayton
Spotlight
Provider of industrial insulation, refractory and acid masonry
products
Systems
Producer of insulated metal panels for commercial, industrial and
cold storage buildings, as well as roof panels, architectural panels
and commercial panelling technology
AJ Brauer Stone
RAF Industries
The company also provides flagstone, field stone, landscape
Climatec Building
Technologies Group
Target
Pegasus Capital Advisors
4/10/2012
4/1/2014
Lee
BrassManagement and
Gypsum
Supply
The
AEAReserve
InvestorsGroup
Provider
of of
brass
casting
products
toother
plumbing
industry
Distributor
drywall,
acoustical
and
specialty
building
materials
4/9/2012
3/31/2014
Prime
Jones Hardwoods
Lumber Company
Cedar
CreekPartners,
Wholesale
Lumber,
BlackEagle
Building
Industry
Charlesbank
Partners
Partners, US Capital
LBM Holdings
3/26/2012
3/26/2014
Baillargeon
Doors
American Hardwood
Industries
3/12/2012
3/10/2014
Lumber Products (Las
Hartland
Controls
Vegas
Distribution
Operations)
NYI Building Products
(Long
Island
Operations)
Koroseal
Interior
Products
Centerbridge
Baillie LumberPartners, Masonite
International, Oaktree Capital
Management
Incline EquityBuilding
PartnersProducts
Architectural
4/21/2012
NA
NA
NA
M&A Activity
$145.0
NA
NA
NA
Deal Size
NA
Target
Revenue
NA
$770.0
NA
NA
Provider
of lumber
of hardwoods,
hardwood
specialty
and and
Supplier of
and building
materials
to theproducts
South Florida
premium
lumber
Caribbean
markets
NA
NA
NA
NA
Manufacturer
provider
of architectural,
institutional,
fire and Its
Manufacturer and
of lumber
products
using a variety
of hardwoods.
commercial wood doors
products are used primarily in the remodeling market, including
Producer of doors and hardwood moulding operations
capacitors
auxiliary
switchesmaterials and woodworking
Provider
of and
building
construction
NA
NA
$20.0
NA
NA
NA
NA
NA
NA
NA
NA
NA
Fabricator, seller and distributor of flat glass and acrylic products
for the construction and glazing industries
Manufacturer and seller of residential galvanized steel duct work in
Distributor
the
U.S. of specialty hardware, surfacing products, flooring and
NA
$41.8
NA
$27.5
NA
NA
NA
NA
Provider of building materials, doors, millwork, trusses, and wall
Manufacturer
of custom
wool
carpets
for architectswall
andpanels,
designers.
panels.
The company
also
provides
pre-fabricated
roof
The flooring
company
designs
and
manufactures
and
material
and
lumbar
material machine and hand made
Provider of building materials, concrete stamps, driveway sealers &
caulks
NA
NA
NA
NA
NA
$184.3
NA
NA
NA
NA
products,Companies
marble, tiles and chopped
white rock Equity
and cut stone
for
Figure 10: Acquisitions of North American Building Products
by Private
Firms
(2012 – Present)
home, patio and pools
($ 4/18/2012
in millions)
Date
Closed
3/5/2012
3/17/2014
2/24/2012
2/14/2014
Acquiror
Architectural
Building Products
Peak Rock Capital
Provider of industrial and large commercial heating, ventilation and
air conditioning equipment
Target Description
supplies.
The company
provides
caulks,interior
sealants,adhesives,
Manufacturer
and distributor
of custom
products including:
roofing
nails wall
and coverings,
coating materials
to the wholesale
construction
commercial
wall protection
systems and
drytrades
eraseable wall coverings
Hawkins Glass
Novik
Wholesalers (Flat Glass
Unit)
Standex Air Distribution
Products
Clearview Capital
Mountain Partners
2/8/2012
2/5/2014
Clermont Builders Supply
Scott Group Custom
Carpet
American Builders Supply, Blue Wolf
Keystone Capital
Capital
1/13/2012
1/23/2014
A.R.T Concrete and Tool
Alleyton Resource
Supply
1/6/2012
1/23/2014
Weaber
Supply
Carter-Waters, Pritzker Group Private
Capital
Blackstone Group
Resilience Capital Partners
Building Partners
Manufacturer of lumber products
NA
$5.0
1/23/2014
The Faucet Queens
Company
markets
NA
NA
Summary
Statistics
1/21/2014
Alliance Steel
Partners
industry. The company's products include frame structures,
panel
No. of Transactions
2/22/2012
2/5/2014
Blue Wolf Capital
High
Manufacturer of extruded plastic products. The company providesMean
plastic products for lawn and gardening, commercial matting, Median
Low
Deal Size
NA
Target
Revenue
NA
18
7
$1,500.0
NA
327.6
164.6
5.0
$1,100.0
NA
230.5
27.5
0.3
NA
NA
Dimex
Rockland Industrial
Products
Lubar & Co
12/31/2013
Sound Seal
Hamilton Robinson Capital Partners
products
$27.0
$18.1
12/19/2013
High Standard
Partners
NA
NA
12/17/2013
Janus International
Saw Mill Capital
veneer metal panels and aluminum composite panels.
NA
NA
12/11/2013
Arbors Direct
Products
NA
NA
12/10/2013
Musselman Lumber
applications
and pre-hung doors
NA
NA
11/27/2013
California Products
NA
NA
11/26/2013
Roman Decorating
Products
Capital
NA
NA
11/26/2013
SCI Floor Covering
Corridor Capital
products
NA
NA
11/14/2013
InterWrap
Quad-C Management
NA
NA
NA
NA
NA
NA
1/14/2014
1/1/2014
Source: PitchBook
11/1/2013
Demilec
Sun Capital Partners
11/1/2013
Home Acres Building
Materials LLC
Supply
www.tmcapital.com
- contractors.
15 - The company offers drywall, steel framing, commercial
M&A Activity
Figure 11: Exits of U.S. Based Building Products Companies by Private Equity Firms (2012 – Present)
($ in millions)
Date
Closed
Company
(Exiting P.E. Sponsor)
Exit Type
Acquiror
Company Description
Deal Size
Company
Revenue
Deal Size
/ Revenue
Company
EBITDA
Deal Size
/ EBITDA
NA
NA
NA
NA
NA
Norment Security Group
(Clearlake Capital Group,
The Gores Group)
Merger /
Acquisition
Cornerstone
Detention Products
Manufacturer of security products and related systems integration
services for prisons and courthouses in the United States.
Installed Building
Products
(Littlejohn & Company)
IPO
NA
Manufactures, distributes and provides installation of building
products for the commercial building industry including
insulations, shower doors, mirrors, shelving and waterproofing
$82.0
NA
NA
NA
NA
Continental Building
Products
(Lone Star Funds)
IPO
NA
Manufactures plasterboard and other gypsum based products for
construction, renovation and interior decoration
$164.7
NA
NA
NA
NA
Norcraft Companies
(Pfingsten Partners,
L.L.C., Goense, Bounds
& Partners)
Alumicor Limited
(Fulcrum Capital
Partners Inc.)
IPO
NA
Manufactures kitchen and bathroom cabinets; also offers stock
and semi-custom frameless and framed products to dealers,
distributors, decor centers and builders
$102.4
$167.6
$0.6
$22.1
$4.6
Merger /
Acquisition
Apogee
Enterprises, Inc.
Manufactures and supplies architectural aluminum building
envelope products for institutional, commercial, and industrial
markets
$52.0
NA
NA
NA
NA
Prestress Engineering
(Aldine Capital Partners)
Merger /
Acquisition
County Materials
Corporation
Manufactures concrete products for the railroad, highway,
waterway and building construction industries including
prestressed and precast bridge products, retention walls and
sound barriers
NA
NA
NA
NA
NA
9/6/2013
Masonite International
(Centerbridge Partners)
IPO
NA
Manufactures interior and exterior doors, door components and
door entry systems for residential and commercial customers
NA
$1,731.1
NA
$5.8
NA
8/20/2013
American Standard
Brands
(Sun Capital Partners)
Merger /
Acquisition
Lixil
Manufactures bath and kitchen products and accessories
including fixtures, faucets, whirlpools and showers
$542.0
NA
NA
NA
NA
8/9/2013
Stock Building Supply
(The Gores Group)
IPO
NA
Provides building materials including trusses, wall panels,
millwork and engineered wood as well as construction services to
professional home builders and contractors
$98.0
$1,197.0
$0.1
$12.8
$7.6
7/19/2013
Moncure Plywood
(Atlas Holdings)
Merger /
Acquisition
Boise Cascade
Manufactures hardwood and softwood plywood used in the
production of upholstered furniture frames
$102.0
NA
NA
NA
NA
6/26/2013
HD Supply
(Bain Capital, Clayton
Dubilier & Rice, The
Carlyle Group, The
Home Depot)
IPO
NA
Provides maintenance and repair products for infrastructure,
construction, maintenance and repair & remodel markets
$957.5
NA
NA
NA
NA
6/20/2013
WoodCrafters Home
Products
(Brookstone Partners)
Merger /
Acquisition
MasterBrand
Cabinets
Manufacturer of home furniture products including: bathroom
vanities, cultured marble, solid surface vanity tops, medicine
cabinets, bath storage cabinets, and a variety of storage products
$302.0
$230.0
$1.3
NA
NA
6/3/2013
Thermafiber
(Altus Capital Partners,
Centerfield Capital
Partners)
Merger /
Acquisition
Owens Corning
Manufactures mineral wool products for the insulation industry
including perimeter high rise-fire containments, pokethroughs /
penetrations and construction joint fire containments
$41.0
NA
NA
NA
NA
5/31/2013
Mitten Inc.
(Graham Partners)
Merger /
Acquisition
Ply Gem Industries,
Inc.
Manufacturer and provider of vinyl siding products. The company
also offers siding and accessories for homes.
$77.4
NA
NA
NA
NA
5/23/2013
Ply Gem Industries
(CI Capital Partners)
IPO
NA
Manufactures specialty vinyl products including windows and
doors, siding, wall and floor coverings for contractors, distributors
and home-center retailers
$331.6
$1,301.3
$0.3
$93.0
$3.6
3/19/2013
Expocrete Concrete
Products Ltd.
(Tricor Pacific Capital,
Inc.)
Merger /
Acquisition
Oldcastle Building
Products Canada,
Inc.
Manufactures and markets concrete hardscape, masonry, and
industrial precast products; it offers paving stones, walkway slabs,
masonry units, yardscapes, garden walls, landscape / retaining
walls and decorative walls
NA
NA
NA
NA
NA
BlueLinx
(Cerberus Capital
Management)
Public
Investment
2nd Offering
NA
Provides building blocks for residential and commercial
construction material, remodeling and repair, manufactured and
modular housing and homeowner projects
$38.7
$2,152.0
$0.0
NA
NA
The Algoma Group
(Industrial Opportunity
Parnters)
Merger /
Acquisition
Masonite
International
Manufactures and distributes customized architectural wooden
doors for the commercial and institutional building markets
NA
NA
NA
NA
NA
Company
EBITDA
Deal Size
/ EBITDA
4/8/2014
2/13/2014
2/4/2014
11/7/2013
11/5/2013
10/16/2013
3/5/2013
4/23/2012
Summary Statistics
Deal Size
Source: PitchBook
www.tmcapital.com
- 16 -
Company
Revenue
Deal Size
/ Revenue
No. of Transactions
13
6
5
4
3
High
Mean
Median
Low
$957.5
222.4
102.0
38.7
$2,152.0
1,129.8
1,249.2
167.6
$1.3
0.5
0.3
0.0
$93.0
33.4
17.5
5.8
$7.6
5.3
4.6
3.6
Case Studies
Case Study: Financial Sponsor Exit to Strategic Buyer
Sun Capital Partners sells American Standard to LIXIL Corporation
In August 2013, LIXIL Corporation, Japan’s largest building materials and housing equipment manufacturer,
acquired 100% of the shares of ASD Americas Holding Corp. (“ASD”), the parent company of American
Standard Brands from an affiliate of Sun Capital Partners, in a deal worth $542 million. Bloomberg news
reported that Adjusted EBITDA for the 12 months ended May 2013 was $48.5 million, implying an TEV/
Adjusted LTM EBITDA multiple of over 11.0x. American Standard will remain headquartered in the United
States and continue to operate all existing facilities.
“American Standard will serve as a key
platform for LIXIL as we continue to fulfill
our ambitions to become a worldwide
leader in the building materials and
housing equipment market…this
transaction will strengthen the brand
and the company’s considerable
manufacturing capabilities and
technological best practices.”
American Standard, a leading North American manufacturer
of high quality kitchen and bath products, provides LIXIL with
greater scale, improved manufacturing and an additional
platform in the North American market. LIXIL has been
extremely acquisitive over the past several years, expanding
both its geographic reach and its product breadth.
– Yoshiaki Fujimori
President, LIXIL Corp.
Following the acquisition of American Standard, LIXIL acquired
German-based GROHE Group S.à r.l., for 3.0 billion euros, the
largest ever German investment by a Japanese company. GROHE is Europe’s leading single-brand manufacturer of premium bathroom,
shower and kitchen fittings.
In December of 2011, LIXIL acquired Permasteelisa S.p.A., a global manufacturer of high-end curtain walls based in Italy for 575 million euros.
Permasteelisa operates in 27 countries including Europe, Asia, North America and the Middle East.
We expect to continue to see global building products companies buying strong brands to expand geographic presence and broaden product
offerings.
Case Study: Financial Sponsor Investment
Ares and Ontario Teachers’ Pension Plan Acquire CPG International
In October 2013, Ares Management LLC and Ontario Teachers’ Pension Plan acquired CPG International Inc.
(“CPG”) from AEA Investors, LP for approximately $1.5 billion including approximately $500 million of debt.
Headquartered in Scranton, PA, CPG is a manufacturer of highly engineered low-maintenance building materials
designed to replace wood, metal and other traditional materials in a variety of building applications. CPG sells its
products into the residential, commercial, and industrial markets under the brand names of AZEK, TimberTech,
VYCOM, and Scranton Products.
“CPG is recognized as an industry leader and
innovator, and we are looking forward to
participating
in the company's
success.”
“CPG is recognized
as an continued
industry leader
and
innovator, and we are looking forward to
– Bennett
Rosenthal
participating
in the company's continued success.”
Co-Head of Private Equity, Ares Management
– Bennett Rosenthal
Co-Head of Private Equity, Ares Management
“We believe CPG is well-positioned for long-term
growth as consumers continue to recognize the
superior
proposition
offered by low-for long-term
“We value
believe
CPG is well-positioned
maintenance
materials.”
growth asbuilding
consumers
continue to recognize the
superior value proposition offered by low– Jane
Rowe
maintenance
building materials.”
Senior Vice-President, Ontario Teachers'
Private
Capital
– Jane
Rowe and Infrastructure
Senior Vice-President, Ontario Teachers'
Private Capital and Infrastructure
www.tmcapital.com
- 17 -
Under AEA, CPG had
executed five acquisitions
and invested over $55 million in capacity
expansion projects. AEA helped grow CPG from
approximately $220 million in revenue in 2005 to
over $500 million, despite the housing downturn
and economic recession.
The acquisition of CPG represents one of the
larger bets on a housing recovery by a large
investment firm. As mentioned throughout our
report, private equity companies have a renewed
interest in the building products market and are
looking to take advantage of the ongoing rebound.
Valuation Considerations
Valuation Considerations
The charts below depict the valuation metrics and stock
performance of the Building Products industry by major
segment. In general, consumer-facing companies with a
strong brand name trade at a premium to more commoditized
companies that rely heavily on raw material inputs (i.e.
insulation and building boards). Other key factors include size,
recent and projected growth trends and EBITDA margins. TEV
/ EBITDA multiples have increased steadily over the past five
years, growing from a range of 6.0x-8.0x in December 2008 to
a range of 10.0x-16.0x today. Forward multiples suggest that
investors expect the housing market rebound to accelerate
in 2014. Additionally, each Building Products category has
outperformed the S&P 500 over the past five years, with
returns ranging from 140.0%-330.0%.
Figure 12: Guideline Public Company TEV / EBITDA Multiples
20.0x
15.0x
14.8x
11.7x
11.2x
10.0x
8.6x
10.6x
11.3x
9.5x
12.9x
10.3x
9.8x
13.2x
12.2x
9.7x
10.2x
8.4x
8.9x
10.0x
11.9x
12.2x
10.3x
10.2x
8.6x
8.2x
7.9x
5.0x
0.0x
LTM
2014E 2015P
Windows & Doors
and Cabinetry
2014E 2015P
LTM 2014E
Plumbing &
Hardware
LTM
2014E 2015P
HVAC & Lighting
LTM
2014E 2015P
Surfaces
LTM
2014E 2015P
LTM
Roofing, Siding &
Insulation
2014E 2015P
Materials
LTM
2014E 2015P
Distributors
LTM
2014E 2015P
TM Capital
Building Products
Index
Figure 13: Historical TEV / EBITDA Multiples
20.0x
Windows & Doors and Cabinetry
Distributors
Surfaces
Materials
HVAC & Lighting
Plumbing & Hardware
S&P 500
18.0x
16.0x
14.0x
12.0x
10.0x
8.0x
6.0x
4.0x
2.0x
0.0x
Dec-08 May-09 Sep-09 Feb-10 Jun-10 Nov-10 Mar-11 Aug-11 Dec-11 May-12 Sep-12 Feb-13 Jun-13 Nov-13 Feb-14
Figure 14: 5-Year Stock Performance
500.0%
400.0%
Surfaces
Windows & Doors and Cabinetry
Plumbing & Hardware
Distributors
HVAC & Lighting
S&P 500
Materials
300.0%
200.0%
100.0%
0.0%
(100.0%)
Apr-09 Aug-09 Jan-10 Jun-10 Oct-10 Mar-11 Jul-11 Dec-11 Apr-12 Aug-12 Jan-13 Jun-13 Oct-13 Mar-14
Source: Capital IQ, TM Capital
www.tmcapital.com
- 18 -
Appendix
Appendix
Selected Public Companies – Windows & Doors and Cabinetry
($ in millions)
Company
Enterprise
Value
Revenue
2014E
LTM
2015P
EBITDA
2014E
LTM
2015P
Enterprise Value / EBITDA
LTM
2014E
2015P
Revenue Growth
5 yr. CAGR 2014E
EBITDA Margins
LTM
2014E
American Woodmark Corp.
Assa Abloy AB
Fortune Brands Home & Security, Inc.
Masco Corporation
Masonite International Corporation
Norcraft Companies, Inc.
PGT, Inc.
Ply Gem Holdings, Inc
$396
21,221
6,822
10,002
1,937
416
553
1,621
$709
7,322
4,157
8,173
1,731
340
239
1,366
$726
8,189
4,660
8,828
1,854
374
287
1,523
$805
8,689
5,123
9,558
2,048
406
329
1,735
$44
1,189
474
894
90
35
36
106
$52
1,520
616
1,063
150
52
49
122
$67
1,661
742
1,245
210
61
67
182
9.0x
17.8
14.4
11.2
21.6
11.8
15.3
15.3
7.6x
14.0
11.1
9.4
12.9
8.1
11.3
13.3
5.9x
12.8
9.2
8.0
9.2
6.8
8.2
8.9
0.9%
11.2%
NA
(2.9%)
(0.7%)
0.5%
1.8%
3.1%
15.1%
8.6%
12.1%
8.0%
7.1%
10.1%
19.8%
11.5%
6.2%
16.2%
11.4%
10.9%
5.2%
10.4%
15.1%
7.7%
7.2%
18.6%
13.2%
12.0%
8.1%
13.8%
17.0%
8.0%
Median
Mean
$1,779
5,371
$1,548
3,005
$1,688
3,305
$1,891
3,587
$98
358
$136
453
$196
529
14.8x
14.5
11.2x
10.9
8.6x
8.6
0.9%
2.0%
10.8%
11.5%
10.7%
10.4%
12.6%
12.2%
Revenue
Selected Public Companies – Plumbing & Hardware
($ in millions)
Company
Assa Abloy AB
Fortune Brands Home & Security, Inc.
Ingersoll-Rand Plc
Masco Corporation
Mueller Water Products, Inc.
Newell Rubbermaid Inc.
Rexnord Corporation
Richelieu Hardware Ltd.
Spectrum Brands Holdings, Inc.
Stanley Black & Decker, Inc.
Toto Ltd.
Tyman plc
Villeroy & Boch AG
Watts Water Technologies, Inc.
Median
Mean
Enterprise
Value
LTM
Revenue
2014E
2015P
LTM
EBITDA
2014E
2015P
LTM
2014E
2015P
Revenue Growth
5 yr. CAGR 2014E
EBITDA Margins
LTM
2014E
$21,221
6,822
17,722
10,002
2,000
9,985
4,596
851
7,332
16,666
4,509
988
393
2,099
$7,322
4,157
12,351
8,173
1,133
5,693
2,053
542
4,316
11,001
5,104
501
1,028
1,474
$8,189
4,660
12,856
8,828
1,133
5,837
2,096
573
4,316
11,472
5,317
595
1,067
1,544
$8,689
5,123
13,528
9,558
1,210
6,062
2,245
609
4,435
12,032
5,310
637
1,107
1,630
$1,189
474
1,477
894
162
913
392
64
631
1,528
580
64
75
184
$1,520
616
1,724
1,063
162
961
418
70
631
1,700
608
91
103
216
$1,661
742
1,919
1,245
197
1,026
457
77
726
1,812
593
102
111
241
17.8x
14.4
12.0
11.2
12.3
10.9
11.7
13.3
11.6
10.9
7.8
15.5
5.3
11.4
14.0x
11.1
10.3
9.4
12.3
10.4
11.0
12.2
11.6
9.8
7.4
10.8
3.8
9.7
12.8x
9.2
9.2
8.0
10.1
9.7
10.0
11.1
10.1
9.2
7.6
9.7
3.5
8.7
11.2%
NA
(1.1%)
(2.9%)
(9.6%)
(2.5%)
1.6%
9.4%
11.0%
20.0%
0.1%
4.9%
(2.7%)
0.6%
8.6%
12.1%
4.1%
8.0%
1.1%
2.5%
4.5%
3.5%
5.6%
4.3%
5.1%
20.5%
4.0%
4.8%
16.2%
11.4%
12.0%
10.9%
14.3%
16.0%
19.1%
11.8%
14.6%
13.9%
11.4%
12.8%
7.3%
12.5%
18.6%
13.2%
13.4%
12.0%
14.3%
16.5%
19.9%
12.2%
14.6%
14.8%
11.4%
15.4%
9.7%
14.0%
$5,709
7,513
$4,237
4,632
$4,488
4,892
$4,779
5,155
$527
616
$612
706
$660
779
11.7x
11.9
10.6x
10.3
9.5x
9.2
0.6%
3.1%
4.7%
6.3%
12.6%
13.2%
14.1%
14.3%
Revenue
Selected Public Companies – HVAC & Lighting
($ in millions)
Enterprise
Value
LTM
Revenue
2014E
2015P
LTM
EBITDA
2014E
2015P
Acuity Brands, Inc.
Daikin Industries Ltd.
Eaton Corporation plc
Hubbell Inc.
Ingersoll-Rand Plc
Johnson Controls Inc.
Koninklijke Philips N.V
Lennox International, Inc.
Nortek Inc.
Schneider Electric S.A.
United Technologies Corp.
$5,298
21,928
43,124
6,715
17,722
37,931
33,395
4,751
2,278
56,607
125,749
$2,242
16,451
22,046
3,184
12,351
43,216
32,176
3,226
2,288
32,482
62,626
$2,242
17,428
22,831
3,375
12,856
43,216
32,882
3,369
2,368
35,248
65,177
$2,382
18,489
24,151
3,576
13,528
43,672
34,702
3,584
2,455
37,109
68,609
$324
2,134
3,307
574
1,477
3,875
4,091
354
211
5,207
11,134
$324
2,007
3,764
622
1,724
3,875
4,712
419
266
5,679
12,186
$355
2,228
4,238
674
1,919
3,847
5,242
474
294
6,229
13,033
16.3x
10.3
13.0
11.7
12.0
9.8
8.2
13.4
10.8
10.9
11.3
16.3x
10.9
11.5
10.8
10.3
9.8
7.1
11.3
8.6
10.0
10.3
14.9x
9.8
10.2
10.0
9.2
9.9
6.4
10.0
7.8
9.1
9.6
0.6%
1.1%
7.5%
3.3%
(1.1%)
2.3%
(2.7%)
(1.4%)
0.2%
4.9%
1.2%
7.3%
27.2%
3.6%
6.0%
4.1%
1.1%
2.4%
5.3%
NA
8.7%
4.1%
14.5%
13.0%
15.0%
18.0%
12.0%
9.0%
12.7%
11.0%
9.2%
16.0%
17.8%
14.5%
11.5%
16.5%
18.4%
13.4%
9.0%
14.3%
12.4%
NA
16.1%
18.7%
Median
Mean
$21,928
32,318
$16,451
21,117
$17,428
21,908
$18,489
22,932
$2,134
2,972
$2,007
3,234
$2,228
3,503
11.3x
11.6
10.3x
10.6
9.8x
9.7
1.1%
1.4%
4.7%
7.0%
13.0%
13.5%
14.4%
14.5%
Company
LTM
2014E
2015P
Revenue Growth
5 yr. CAGR 2014E
EBITDA Margins
LTM
2014E
Revenue
Selected Public Companies – Surfaces
($ in millions)
Company
Enterprise
Value
Armstrong World Industries, Inc.
$3,879
CaesarStone Sdot-Yam Ltd.
1,852
Headwaters Incorporated
1,323
Interface Inc.
1,463
Internacional de Cerámica, S.A.B. de C.V.
491
Louisiana-Pacific Corp.
2,262
Mohawk Industries Inc.
12,033
Panariagroup Industrie Ceramiche S.p.A.
230
Tarkett S.A.
2,886
The Dixie Group, Inc.
319
Trex Co. Inc.
1,261
Median
Mean
$1,463
2,546
LTM
Revenue
2014E
2015P
EBITDA
2014E
$2,720
357
719
960
512
2,085
7,349
381
3,471
345
343
$2,830
425
719
1,040
NA
2,189
8,145
390
3,478
394
397
$3,048
499
781
1,133
NA
2,625
8,672
427
3,640
425
460
$283
91
109
113
58
273
999
13
387
24
41
$412
112
109
150
NA
275
1,207
33
424
NA
90
$495
136
136
175
NA
448
1,352
39
464
NA
115
13.7x
20.3
12.1
12.9
8.5
8.3
12.0
17.9
7.4
13.3
31.0
9.4x
16.6
12.1
9.7
NA
8.2
10.0
7.0
6.8
NA
14.0
7.8x
13.7
9.7
8.4
NA
5.1
8.9
6.0
6.2
NA
11.0
(4.3%)
NA
(4.5%)
(2.4%)
4.7%
8.6%
1.5%
(3.7%)
3.7%
4.1%
0.8%
4.0%
19.1%
2.3%
8.3%
NA
5.0%
10.8%
2.6%
NA
14.1%
15.8%
10.4%
25.6%
15.2%
11.8%
11.3%
13.1%
13.6%
3.4%
11.2%
6.9%
11.9%
14.6%
26.3%
15.2%
14.5%
NA
12.6%
14.8%
8.5%
NA
NA
22.7%
$719
1,749
$879
2,001
$957
2,171
$109
217
$150
313
$175
373
12.9x
14.3
9.7x
10.4
8.4x
8.5
1.1%
0.8%
8.3%
9.1%
11.8%
12.2%
14.7%
16.1%
LTM
Source: Capital IQ. As of April 11, 2014
www.tmcapital.com
- 19 -
2015P
LTM
2014E
2015P
Revenue Growth
5 yr. CAGR 2014E
EBITDA Margins
LTM
2014E
Revenue
Appendix
Appendix (cont.)
Selected Public Companies – Roofing, Siding & Insulation
($ in millions)
Enterprise
Value
LTM
Revenue
2014E
2015P
Carlisle Companies Incorporated
Compagnie de Saint-Gobain
James Hardie Industries plc
Owens Corning
Ply Gem Holdings, Inc
$5,022
44,387
5,495
2,262
6,952
1,621
$2,943
57,962
1,444
2,085
5,295
1,366
$3,148
58,133
1,481
2,189
5,592
1,523
$3,393
60,603
1,710
2,625
5,964
1,735
$479
5,604
289
273
700
106
$533
6,171
316
275
833
122
$585
6,889
392
448
959
182
10.5x
7.9
19.0
8.3
9.9
15.3
9.4x
7.2
17.4
8.2
8.3
13.3
8.6x
6.4
14.0
5.1
7.3
8.9
0.5%
(1.1%)
(2.1%)
8.6%
(2.0%)
3.1%
7.0%
0.4%
12.1%
5.0%
5.6%
11.5%
16.3%
9.7%
20.0%
13.1%
13.2%
7.7%
16.9%
10.6%
21.3%
12.6%
14.9%
8.0%
Median
Mean
$5,258
10,956
$2,514
11,849
$2,668
12,011
$3,009
12,672
$384
1,242
$424
1,375
$517
1,576
10.2x
11.8
8.9x
10.6
7.9x
8.4
(0.3% )
1.2%
6.3%
6.9%
13.1%
13.3%
13.7%
14.1%
Company
EBITDA
2014E
LTM
2015P
LTM
2014E
2015P
Revenue Growth
5 yr. CAGR 2014E
EBITDA Margins
LTM
2014E
Revenue
Selected Public Companies – Materials
($ in millions)
Enterprise
Value
LTM
Revenue
2014E
2015P
EBITDA
2014E
2015P
Architectural Paint
Masco Corporation
PPG Industries Inc.
The Sherwin-Williams Company
The Valspar Corporation
$10,002
29,549
20,759
7,560
$8,173
15,636
10,385
4,185
$8,828
15,402
11,098
4,185
$9,558
16,162
11,819
4,420
$894
2,392
1,342
641
$1,063
2,399
1,495
641
$1,245
2,569
1,741
688
11.2x
12.4
15.5
11.8
9.4x
12.3
13.9
11.8
8.0x
11.5
11.9
11.0
(2.9%)
(1.0%)
5.0%
3.3%
8.0%
1.9%
9.0%
2.0%
10.9%
15.3%
12.9%
15.3%
12.0%
15.6%
13.5%
15.3%
Median
Mean
$15,380
16,967
$9,279
9,595
$9,963
9,878
$10,689
10,490
$1,118
1,317
$1,279
1,399
$1,493
1,561
12.1x
12.7
12.1x
11.9
11.2x
10.6
1.2%
1.1%
5.0%
5.2%
14.1%
13.6%
14.4%
14.1%
Building Boards
International Paper Company
Norbord, Inc.
Weyerhaeuser Co.
$30,031
2,262
1,582
20,917
$29,080
2,085
1,343
8,529
$29,232
2,189
1,326
8,903
$29,766
2,625
1,470
9,567
$3,760
273
286
1,613
$4,492
275
200
1,799
$4,797
448
296
2,100
8.0x
8.3
5.5
13.0
6.7x
8.2
7.9
11.6
6.3x
5.1
5.3
10.0
3.2%
8.6%
7.3%
1.0%
0.5%
5.0%
(1.3%)
4.4%
12.9%
13.1%
21.3%
18.9%
15.4%
12.6%
15.1%
20.2%
Median
Mean
$11,590
13,698
$5,307
10,259
$5,546
10,412
$6,096
10,857
$950
1,483
$1,037
1,691
$1,274
1,910
8.1x
8.7
8.1x
8.6
5.8x
6.7
5.3%
5.0%
2.5%
2.1%
16.0%
16.6%
15.2%
15.8%
Flat Glass
Apogee Enterprises, Inc.
Asahi Glass Co. Ltd.
Central Glass Co. Ltd.
CRH plc
Nippon Sheet Glass Co., Ltd.
PPG Industries Inc.
$879
11,457
964
25,399
5,239
29,549
$771
12,868
1,812
24,869
5,728
15,636
$893
13,314
1,847
25,940
5,821
15,402
$999
13,603
1,817
27,599
6,045
16,162
$67
2,102
132
1,481
423
2,392
$93
2,038
166
2,376
428
2,399
$131
2,055
174
2,785
620
2,569
13.2x
5.4
7.3
17.1
12.4
12.4
9.4x
5.6
5.8
10.7
12.2
12.3
6.7x
5.6
5.5
9.1
8.4
11.5
(3.6%)
(4.7%)
(1.0%)
(3.2%)
(8.6%)
(1.0%)
15.7%
6.1%
0.3%
4.5%
5.2%
1.9%
8.7%
16.3%
7.3%
6.0%
7.4%
15.3%
10.5%
15.3%
9.0%
9.2%
7.3%
15.6%
Median
Mean
$8,348
12,248
$9,298
10,281
$9,567
10,536
$9,824
11,037
$952
1,100
$1,233
1,250
$1,338
1,389
12.4x
11.3
10.1x
9.3
7.6x
7.8
(3.4% )
(3.7% )
4.8%
5.6%
8.0%
10.2%
9.8%
11.1%
Other Materials
BlueScope Steel Limited
Compagnie de Saint-Gobain
Eagle Materials Inc.
Fletcher Building Ltd.
Gibraltar Industries, Inc.
Insteel Industries Inc.
NCI Building Systems Inc.
Owens Corning
Quanex Building Products Corporation
Simpson Manufacturing Co., Inc.
USG Corporation
Vulcan Materials Company
$3,931
44,387
4,721
7,132
660
418
1,417
6,952
733
1,368
6,059
10,792
$7,082
57,962
868
7,203
828
374
1,321
5,295
969
706
3,570
2,771
$7,668
58,133
918
7,517
867
374
1,321
5,592
668
764
3,944
2,868
$8,322
60,603
1,135
7,959
921
401
1,420
5,964
676
836
4,382
3,122
$319
5,604
217
667
75
29
42
700
54
112
416
459
$567
6,171
280
728
87
29
42
833
59
136
608
579
$702
6,889
402
805
99
40
86
959
76
159
756
739
12.3x
7.9
21.8
10.7
8.8
14.4
33.8
9.9
13.6
12.2
14.6
23.5
6.9x
7.2
16.8
9.8
7.6
14.4
33.8
8.3
12.3
10.1
10.0
18.6
5.6x
6.4
11.7
8.9
6.7
10.4
16.4
7.3
9.6
8.6
8.0
14.6
(7.8%)
(1.1%)
(3.0%)
4.1%
(3.5%)
0.6%
(5.8%)
(2.0%)
1.9%
0.9%
(5.0%)
(5.4%)
14.9%
0.4%
42.9%
14.1%
4.8%
2.7%
1.0%
5.6%
(29.9%)
8.2%
10.5%
3.5%
4.5%
9.7%
25.0%
9.3%
9.1%
7.7%
3.2%
13.2%
5.6%
15.9%
11.7%
16.6%
7.4%
10.6%
30.5%
9.7%
10.0%
7.7%
3.2%
14.9%
8.9%
17.8%
15.4%
20.2%
Median
Mean
$4,326
7,381
$2,046
7,412
$2,095
7,553
$2,271
7,979
$268
724
$424
843
$552
976
13.0x
15.3
10.0x
13.0
8.7x
9.5
(2.5% )
(2.2% )
5.2%
6.6%
9.5%
10.9%
10.3%
13.0%
Median
Mean
$9,969
12,574
$7,293
9,387
$7,556
9,595
$7,960
10,091
$951
1,156
$1,135
1,296
$1,306
1,459
12.2x
12.0
10.0x
10.7
8.2x
8.6
(0.6% )
0.1%
4.9%
4.9%
11.8%
12.8%
12.3%
13.5%
Company
LTM
LTM
2014E
2015P
Revenue Growth
5 yr. CAGR 2014E
EBITDA Margins
LTM
2014E
Revenue
Selected Public Companies – Distributors
($ in millions)
Enterprise
Value
LTM
Revenue
2013E
2014P
Beacon Roofing Supply, Inc.
Boise Cascade Company
Builders FirstSource, Inc.
HD Supply Holdings, Inc.
SIG plc
Stock Building Supply Holdings, Inc.
Pool Corp.
Watsco Inc.
Wolseley plc
$1,967
1,242
1,151
10,408
2,256
559
2,917
3,874
16,152
$2,279
3,273
1,490
8,487
4,568
1,197
2,116
3,792
22,502
$2,279
3,813
1,771
9,126
4,545
1,420
2,250
4,012
22,502
$2,420
4,363
2,070
9,934
4,787
1,720
2,433
4,284
22,287
$157
138
57
707
202
24
182
294
1,362
$157
180
100
874
237
51
206
303
1,362
$184
224
140
1,021
284
83
235
347
1,487
12.5x
9.0
20.1
14.7
11.2
23.6
16.1
13.2
11.9
12.5x
6.9
11.5
11.9
9.5
11.1
14.2
12.8
11.9
10.7x
5.6
8.2
10.2
7.9
6.7
12.4
11.2
10.9
4.7%
NA
8.5%
NA
0.3%
NA
3.1%
17.1%
(7.4%)
1.7%
16.5%
18.9%
7.5%
0.9%
18.6%
8.2%
7.2%
12.7%
6.9%
4.2%
3.8%
8.3%
4.4%
2.0%
8.6%
7.7%
6.1%
6.9%
4.7%
5.7%
9.6%
5.2%
3.6%
9.1%
7.6%
6.1%
Median
Mean
$2,256
4,503
$3,273
5,523
$3,813
5,747
$4,284
6,033
$182
347
$206
385
$235
445
13.2x
14.7
11.9x
11.4
10.2x
9.3
3.9%
4.4%
8.2%
10.2%
6.1%
5.8%
6.1%
6.5%
Company
EBITDA
2013E
LTM
Source: Capital IQ. As of April 11, 2014
www.tmcapital.com
- 20 -
2014P
LTM
2013E
2014P
Revenue Growth
5 yr. CAGR 2013E
EBITDA Margins
LTM
2013E
Revenue
Contact Information
TM Capital’s Industrial Team
W. Gregory Robertson
Managing Director
(212) 809-1410
[email protected]
Paul R. Smolevitz
Managing Director
(212) 809-1416
[email protected]
Michael S. Goldman
Managing Director
(212) 809-1419
[email protected]
Jerome S. Romano
Managing Director
(617) 259-2206
[email protected]
Andy B. Krna
Associate
(212) 809-1442
[email protected]
Vidur Kapur
Analyst
(212) 809-1422
[email protected]
TM Capital Corp. Disclaimer
The information and opinions in this report were prepared by TM Capital Corp. (“TM”). The information herein is believed by TM to be reliable but TM makes no representation as to the accuracy
or completeness of such information. There is no guarantee that the views and opinions expressed in this communication will come to pass. TM may provide, may have provided or may seek to
provide advisory services to one or more companies mentioned herein. In addition, employees of TM may have purchased or may purchase securities in one or more companies mentioned in this
report. Opinions, estimates and analyses in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinions of TM and are subject to
change without notice. TM has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, estimate, forecast
or analysis set forth herein, changes or subsequently becomes inaccurate. This report is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation
of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction.
www.tmcapital.com
TM Capital Corp. is a partner-owned investment banking firm based in New York, Boston and Atlanta, which has
completed over 250 transactions with a combined value in excess of $14 billion. Since 1989, we have advised
clients navigating a full range of critical transactions, including complex mergers, acquisitions, debt and equity
financings, minority and majority recapitalizations, restructurings, and advisory services including takeover defense,
fairness and solvency opinions, valuations, as well as litigation support. We have built deep industry expertise in key
sectors and our team regularly publishes research highlighting current and emerging trends in targeted industries
and markets. TM Capital is a member firm of M&A International Inc., the world’s leading alliance of mid-market
investment banks with over 600 M&A professionals in 40 countries. Members have closed over 1,300 transactions
totaling more than $75 billion in value over the past five years. For more information, visit www.tmcapital.com.
New York
641 Lexington Avenue
30th Floor
New York, NY 10022
Tel: (212) 809-1360
Boston
200 Clarendon Street
25th Floor
Boston, MA 02116
Tel: (617) 259-2200
Atlanta
15 Piedmont Center NE
Suite 1010
Atlanta, GA 30305
Tel: (404) 995-6230
Member: FINRA/SIPC

TM Capital Building Products Report Industry Spotlight

Transcription

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