New York private equity firm Caxton-Iseman Capital announced an agreement in which its portfolio company, the construction materials maker Ply Gem Industries, will acquire rival Alcoa Home Exteriors in a transaction worth approximately $305 million (€240 million).
Ply Gem will use a combination of debt and cash on hand to purchase the company. The transaction is expected to close in the fourth quarter of 2006. Investment bank Lehman Brothers will serve as advisor to Alcoa on the transaction.
Missouri-based Ply Gem, acquired by Caxton-Iseman in 2004, manufactures residential construction and professional renovation products under the Variform, MW, Patriot, Alenco, Great Lakes, Napco, Kroy and CWD brand names. In February, Ply Gem agreed to acquire Texas-based aluminum window and door manufacturer AWC Holding Company and its subsidiaries in a cash transaction worth about $120 million.
“The Alcoa Home Exteriors business is a solid performer with good returns, but it no longer fits with our core global building and construction business portfolio,” said Alain Belda, Alcoa’s chairman and CEO, in a statement. Alcoa Home Exteriors, a subsidiary of Alcoa, the world’s leading aluminum producer, has a portfolio of more than 14,000 products, including vinyl siding and aluminum siding. Alcoa Home Exteriors’ manufacturing facilities are located in Atlanta, Texas, South Carolina, Ohio and Virginia.
Caxton-Iseman’s portfolio companies also include Buffets, an owner and operator of buffet-style restaurants; Electrograph Systems, a national distributor of display technology; and Prodigy Health Group, a heath care service company. The firm’s various investment vehicles have available capital of more than $2 billion.