What’s News May/June 2022May 20th, 2022 by Nathan Hobbs
Companies Show Deliberate Responses to Russian Invasion
After satellite imagery showed a buildup of Russian troops along Ukraine’s border, prompting U.S. officials to warn of a possible invasion, those grim predictions came true in February. In the weeks ahead, U.S. government officials and U.S.-based companies with operations in Russia deliberated over how they might respond to such an attack, prompting many to withdraw investments and operations.
“Markets are roiled. Companies are exiting,” Isabelle Icso, director of international policy at the U.S. Chamber of Commerce, told members of the Window and Door Manufacturers Association (WDMA) at the association’s virtual Spring Meeting and Legislative Conference. More than 400 had suspended or completely withdrawn operations, including, Icso said, some related to the door and window industries.
“The sanctions environment essentially makes exiting [Russia] necessary, along with just the fact that profits aren’t even really able to be made for a number of reasons, including the sanctions as well as Russian laws that are under consideration,” she added. “All in all, reputational risk is a major consideration.”
In March, the administration called for an end to permanent, normal trade relations with Russia. After preparing contingency plans ahead of the conflict, Rehau Group announced it was suspending operations in Russia and Belarus, condemning the attacks. “It is a war against humanity, the freedom of all of us and peace in Europe, and thus against the values for which we as a Rehau Group stand with all our subgroups,” officials said.
Velux Group initially suspended activities, later deciding to close its operations in Russia and Belarus, permanently settling obligations to creditors and customers. Officials said the group would file for voluntary liquidation in Russia and Belarus so that its operations there can legally be de-listed. “We deeply regret the consequences this decision will have on our skilled employees and will ensure that they all receive fair severance as thanks for their dedicated efforts during many years,” said David Briggs, the company’s CEO.
Officials for Koch Industries decided to continue operation of the company’s Guardian Glass float lines in Russia, maintaining that the risks for employees would increase by ceasing operations. That decision was later reversed. Koch doubled back, calling for employees to shut down its two glass plants in late April, after developments made operational conditions “untenable,” officials said. The company said it’s working with local management to develop an exit strategy that mitigates concerns for employee safety and a government takeover of facilities.
Trimlite Acquires Builders Hardware
Trimlite Mfg Inc., a North American manufacturer and distributor of residential doors and related door products, acquired Builders Hardware Inc. (BHI), a distributor of exterior door products and hardware.
Founded in 1954 and headquartered in Tampa, Fla., BHI has what officials for Trimlite called “a strong presence across Florida,” providing high-quality products and value-added services to its network of customers.
“I’d like to thank the Godwin family for their decades-long stewardship of this high-quality company. Les, Joel, and Jesse have built a wonderful distribution company, and their values complement ours. We look forward to supporting BHI in their next phase of growth,” said Patrick Hooper, CEO of Trimlite.
Sherwin-Williams Acquires AquaSurTech
Sherwin-Williams Company completed the acquisition of AquaSurTech. Officials say the transaction strengthens Sherwin-Williams’ position as a provider of coatings solutions in the building products market.
For more than 25 years, AquaSurTech has focused on the development, manufacturing, and sale of durable, environmentally-friendly coatings for the vinyl/PVC building products industry. The company has manufacturing facilities in greater Toronto and color blending facilities in the U.S. and Canada.
Tundraland Acquired by Leaf Home
Leaf Home, a technology-enabled provider of home solutions, announced it completed the acquisition of Tundraland Home Improvement. Headquartered in Kaukauna, Wis., Tundraland serves the entire state, providing home upgrades, including baths, decks, and cabinet refacing. Tundraland and its team of more than 200 employees will continue to grow with the support of Leaf Home, officials said, which has more than 150 locations across North America and earned $1.1 billion in revenue in 2020.
“We’re excited to welcome Tundraland to the Leaf Home family. Like us, their dedicated team understands how overwhelming a home upgrade can be and is dedicated to making customers happy,” said Jeff Housenbold, president and CEO of Leaf Home.
Metrie Acquires EL & EL Wood Products Corp.
Metrie, a manufacturer and distributor of millwork solutions, acquired EL & EL Wood Products Corp., a two-step distributor of moulding, millwork and door products across the Southwest region of the U.S. “Metrie is growing,” says Kent Bowie, Metrie president and CEO. “As a company we are committed to bringing the best experience in the industry to our valued partners. However, until today’s announcement, we had a relatively small distribution footprint in California, the fifth largest economy in the world.”
TAL Holdings Acquires Orofino Builders Supply
TAL Holdings, a family-owned building material center in the Pacific Northwest, announced an agreement to acquire Orofino Builders Supply, a five-store chain in Idaho.
Orofino began in 1928 when Oren Crockett bought an interest in the JM Bryant store in Orofino, Idaho. In 1930, Oren and his wife, Nell, bought out John Bryant and started Crockett’s Hardware. Over four generations, the family grew the business from a small hardware store to a five-store operation.
Steves and Sons Opposes Buyer in Jeld-Wen Plant Sale
A lawsuit between Steves and Sons Inc. and Jeld-Wen might be over, but the details linger, after Steves and Sons filed an objection to the report and recommendation for the sale of Jeld-Wen’s Towanda, Pa.- based manufacturing plant. In June 2016, Steves and Sons filed a lawsuit against Jeld-Wen, alleging that the company violated U.S. antitrust laws when it merged with a competitor, CraftMaster Manufacturing Inc. (CMI), acquiring its Towanda, Pa.- based doorskin plant. A trial-by-jury process upheld that notion, ordering Jeld-Wen to sell the plant. Lawyers for Steves and Sons didn’t mince words in the company’s objection, suggesting, “Steves and Sons Inc. didn’t fight this battle for five years—and obtain a first-ever divestiture order by a private party—just so that it could face a monopoly supplier and try to protect itself only by contract.” After reviewing both the Special Master’s Report and Recommendation and Steves & Sons’ objection to said report, Judge Robert E. Payne invited the Department of Justice to weigh in by way of impartial opinion.
Lawyers who weighed in on the amicus brief noted that while the court, “has not at this point undertaken an independent investigation and offers no conclusions as to the outcome of the analysis, the factors that the Special Master considered in evaluating the bidders … were relevant to assessing the effectiveness of the remedy,” adding, “The Special Master applied correct principles related to the anticompetitive potential of a vertical merger and was appropriately skeptical of the impact of potential efficiencies.”
Cornerstone Building Brands to Go Private in $5.8 Billion Deal
Cornerstone Building Brands entered into a definitive agreement to be acquired by affiliates of Clayton, Dubilier & Rice (CD&R). The all-cash deal carries an enterprise value of approximately $5.8 billion, including the assumption of debt, and will result in Cornerstone becoming a private company.
CD&R is currently the beneficial owner of approximately 49% of Cornerstone’s outstanding shares of common stock. The proposed transaction offers shareholders $24.65 in cash per share, representing an approximately 16% premium to the closing price of common stock as of March 4, 2022.
The transaction has been approved by a special committee of independent directors of Cornerstone’s board of directors, previously formed to evaluate and consider any potential or actual proposal from CD&R.
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