Harvest returns $258m in recap

The New York firm’s portfolio company AMH Holdings completes a debt offering and returns a dividend to its equity holders.

New York-based private equity firm Harvest Partners, along with Boston-based private equity co-investor Weston Presidio, announced today that portfolio company AMH Holdings completed an offering of senior discount notes, yielding approximately $258 million (€210.7 million).

 

Net proceeds from the offering will be used to redeem all of AMH’s preferred stock, including accrued dividends; pay a dividend to AMH’s common stockholders; and pay a bonus to certain members of senior management, according to a press statement.

 

AMH is the indirect parent company of Associated Materials Incorporated (AMI), a building products company that primarily makes and distributes vinyl siding and windows for residential homes. Harvest along with some of its limited partners, Weston Presidio and the Texas Growth Fund took AMI private in April 2002 in a $436 million deal. Last August, AMI purchased vinyl and window manufacturer Gentek Holdings for approximately $118 million in cash.

 

According to Harvest senior managing director Tom Arenz, the recapitalisation happened because “[AMH] has performed extremely well, managing to pay off debt incurred in the original transaction in 2002, and more recently debt [the company] incurred in buying Gentek.”

 

Arenz said the US housing market has been cooperative, with more strong sales of existing homes, which is a primary driver of remodeling expense – two-thirds of AMH's products are used for home renovation. There have also been trends towards larger homes and demographic factors, including an increase in the segment of the population that favors low-maintenance exterior residential building products.

 

Founded in 1981, Harvest Partners focuses on specialty services, consumer, manufacturing, and distribution businesses. The firm currently manages more than $1 billion in capital. In December, Harvest bought a majority stake in Canada-based bus manufacturer New Flyer Industries from New York-based distressed investment specialist KPS Special Situations in a deal press reports cited as being worth approximately $300 million.