According to Freedonia Group industry analyst Matt Zielenski, “The union of NCI Building Systems and Ply Gem will create a well-balanced building materials manufacturing firm.” On Tuesday, the companies announced that they will combine in a stock-for-stock merger that will create a single company with an equity value of about $2.6 billion.

NCI is a leading producer of prefabricated metal buildings and metal roof and wall components used mainly in commercial construction applications – particularly in the new build market. Ply Gem, on the other hand, primarily is active in the residential market, especially in the replacement segment, where the company derives significant aftermarket sales from homeowners replacing older siding, windows, and exterior trim.

“The combined company will be better able to withstand swings in the construction cycle,” says Zielenski.

In addition, the new company is poised to be a leading supplier of exterior building products, particularly those that offer enhanced energy savings.

“Construction professionals are continually looking for environmentally friendly building products that reduce energy consumption while remaining visually appealing,” said Zielenski. “Both companies have extensive product portfolios in this growing market segment – Ply Gem with its offerings of insulated vinyl siding and Energy Star-compliant windows and doors, and NCI Building Systems with its insulated metal panel product offerings.”