Quanex Building Products Agrees to Acquire Woodcraft Industries
• Timely and Highly-Complementary Expansion into $3B Kitchen and Bath Cabinet Component Market
• Transaction Expected to be Accretive to 2016 EPS and EBITDA Margins
• Adds $45M-$50M to Mid-Cycle EBITDA Guidance
HOUSTON –Â Quanex Building Products Corporation (NYSE:NX) ("Quanex"), a leading supplier of window and door components, today announced that it has significantly broadened its product portfolio and service model by entering into an agreement to acquire Woodcraft Industries ("Woodcraft"), a premier supplier of doors and components to leading original equipment manufacturers ("OEMs") in the kitchen and bathroom cabinet industry. The all-cash transaction, which is expected to close in the 4th calendar quarter of 2015, is valued at approximately $248.5M and will be funded with a combination of cash on-hand, a new asset-based revolving credit facility and a new term loan, each of which will be entered into prior to the closing of the acquisition. Woodcraft is expected to add $240M in revenues at 13% EBITDA margins to Quanex's growing portfolio as a leading OEM component supplier in Building Products.
For more than 70 years, Woodcraft has been recognized as one of the largest and most prestigious providers of hardwood and engineered wood doors and components to prominent kitchen and bath cabinet manufacturers throughout North America. The company has a strong record of financial performance, including double-digit operating margins through the last downturn. Woodcraft's 13 production facilities and four distribution locations throughout the United States, Canada, and Mexico ensure industry-leading capabilities, responsiveness, and quality assurance for a broad range of products, including hardwood doors, hardwood components, engineered wood and drawer components.
The current management team, led by President Dale Herbst, will continue to operate Woodcraft from its St. Cloud, Minnesota headquarters as a wholly-owned subsidiary of Quanex, building upon its track record of profitable growth.
Bill Griffiths, Quanex's Chairman, President and Chief Executive Officer, stated, "Quanex's growth strategy is based, in part, on highly-complementary acquisitions that contribute proven technologies, products and enhanced scale. Woodcraft is an ideal strategic and financial fit in this regard. It is, first and foremost, a well-run company that adds $3B to our addressable market. Woodcraft's breadth of products and stellar customer relationships are unmatched in the industry and also represent uniquely positive and durable attributes. Woodcraft's business model is also very similar to our operations in that they serve large OEM customers. Finally, we expect the acquisition will deliver clear financial benefits to Quanex shareholders as we continue to prudently build the company for sustained profitability."
Mr. Griffiths concluded, "We welcome Woodcraft employees to the Quanex team and look forward to their contributions."
Mr. Herbst added, "Upon closing, the transaction will represent the best of both worlds: a continuation of Woodcraft's craftsmanship and unrelenting customer focus combined with access to Quanex's resources in pursuit of new opportunities in the growing cabinet industry. More generally, it was important that we align with an organization that shares our values and that is committed to expanded opportunities for our employees and service excellence for our customers. Quanex is an ideal partner for us moving forward, and we look forward to a bright future together."
Wells Fargo Securities served as exclusive financial advisor and Gardere Wynne Sewell LLP served as legal counsel to Quanex Building Products in connection with the transaction.
Quanex has posted a presentation on its website, that provides a summary of the transaction's strategic rationale and financial benefits.
About Quanex Building Products
Quanex Building Products Corporation is headquartered in Houston, Texas with locations around the world. Its mission is, "to positively impact our customers, employees and shareholders and put them at the center of everything we do, through innovation, technology, best-in-class customer service and excellent returns." An industry-leading manufacturer of engineered materials and components for building products sold to Original Equipment Manufacturers (OEMs), Quanex designs and produces energy-efficient window and door products, systems and solutions.
Employing top talent, developing forward-thinking technologies and solutions with an emphasis on energy efficiency and aesthetics, continuous improvement and integrity remain the cornerstones of Quanex's business as it positions itself for future growth in the building products market with a special emphasis on supplying innovative new products to the fenestration industry.
For more information visit www.quanex.com.
Contact Information:
Financial Contact:
Marty Ketelaar
martin.ketelaar@quanex.com
713-877-5402
Media Contact:
Jonathan Morgan or Jennifer Sanders
Perry Street Communications
jmorgan@perryst.com
jsanders@perryst.com
214-965-9955
SOURCE Quanex Building Products Corporation
Web Site: http://www.quanex.com
