Quanex Acquires Flamstead Holdings

June 16th, 2015 by Casey Flores

In a strategic move to expand its reach into the vinyl extrusion business in Europe, Houston-based Quanex Building Products has acquired U.K.-based Flamstead Holdings, parent company of HL Plastics, Wegoma Machinery Sales and Vintage Windows.

The all-cash transaction was valued at approximately $145 million, according to a Quanex press release.

HL specifically is known for its Liniar brand name, which produces extrusions for windows, doors and conservatories, making up 85 percent of the company’s revenue.

“Quanex’s growth strategy is predicated on improved profitability in our core businesses, as well as the acquisition of businesses that contribute proven technologies, products and enhanced scale,” says Quanex president and CEO Bill Griffiths. “The acquisition of HL delivers on all fronts, as it should contribute top and bottom line growth, an expanded presence in the favorable UK market, and access to new, complementary product lines. Moreover, HL’s existing leadership team has committed to remain in place, helping to ensure that Quanex benefits from HL’s vinyl extrusion process and technology capabilities.”

That leadership team will include Flamstead Holdings’ CEO Roger Hartshorn.

“By remaining financially involved and continuing as Group CEO for a minimum of five years, I am ensuring it will be ‘business as usual’ for staff and customers alike,” Hartshorn says.

The acquisition provides “key” strategic and financial benefits, according to the Quanex release, including:

  • Expanding the company’s reach in theK. housing market;
  • Leveraging the company’s existing expertise in theK. market obtained through its 2011 acquisition of Edgetech;
  • Adding HL’s “skilled vinyl extrusion expertise;”
  • Benefiting shareholders from the addition of approximately $100M of enhanced revenue;
  • The deal valuation does not include potential for additional value creation from synergy opportunities with Edgetech, process and technology improvements and growth in new product categories; and,
  • The transaction was funded from existing cash plus revolver.

“Quanex enjoys a clear leadership position as a preeminent component supplier to the fenestration industry, and as such represents a logical and compelling strategic fit for HL at this beneficial inflection point in the U.K. housing market,” says Hartshorn. “I am excited for our team to join Quanex, and am confident that our employees and customers will benefit from the combination of our outstanding companies.”

This article is from Door and Window Market [DWM] magazine's free e-newsletter that covers the latest door and window industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to [DWM] magazine in print or digital format are available. Subscribe at no charge HERE.

Tags: , , , , , , , ,

Leave Comment