Sun Capital Partners is betting on the struggling US construction sector recovering, buying distressed assets cheaply with the anticipation of a rebound, it said.
The firm has purchased the assets of Vitro America, a Tennessee-based construction product, glass and industrial supply company for $44 million in a liquidation sale, according to bankruptcy court documents and a statement from the firm.
The US Bankruptcy Court for the Northern District of Texas Dallas Division approved the transaction on 17 June. Vitro had been forced into bankruptcy involuntarily in November by a group of its creditors. The company was adversely affected by the economic downturn, court documents said, which started with a housing crash in the US that has kept the construction sector struggling.
Despite the challenges facing US housing and construction, Sun Capital has been working to expand its portfolio of building materials companies, the firm said. Last year, Sun acquired another glass manufacturer, Arch Aluminium & Glass. Vitro includes three divisions devoted to the production of glass, architectural products and components for skylights.
“Sun Capital feels that they’re fundamentally good companies that have been affected by the downturn,” a Sun spokesperson said. “They feel that they can buy these companies now, operate them through the downturn and then have them be industry leaders when the market rebounds.”
Sun made the investment through its $6 billion fifth fund, which is more than 50 percent invested.