Sacramento Business Journal - October 15, 2007
Friday, October 12, 2007
Window-maker CertainTeed, with local plant, bought by Ply Gem Industries
When one window closes ...
Sacramento Business Journal - by Melanie Turner Staff writer
Noel Neuburger | Sacramento Business Journal
Workers at the CertainTeed window plant in West Sacramento are not expected to lose their jobs.
CertainTeed Corp.'s vinyl window and patio door business has been sold to Ply Gem Industries Inc., three years after an aggressive effort to lure the manufacturer to open a 229,000-square-foot West Sacramento plant.
Details were not released. The deal closed Sept. 30.
Despite a slowdown in new-home construction, Kearney, Mo.-based Ply Gem, which also makes and markets a range of building products for homes, expects continued growth for the fast-growing West Sacramento plant.
"The local facility has not lost, nor will it lose, any employees as a result of the acquisition," said Jeff Klein, president of the new Ply Gem Pacific Window Corp., formerly CertainTeed Pacific Windows, in Auburn, Wash. "We see (West) Sacramento as one of the great growth opportunities ... in the country for us because we can add personnel and equipment without expanding the facility."
So far, the local plant has captured a relatively small share of the market here -- leaving room to grow, he said.
Ply Gem financed the cash transaction through its private equity sponsor, Caxton-Iseman Capital Inc. of New York. Ply Gem has a $75 million revolving credit facility set up with Caxton-Iseman, which bought Ply Gem Industries in 2004. Ply Gem's parent company, Ply Gem Holdings, reported sales of $1.05 billion in 2006.
The acquisition will enable Ply Gem to capitalize on market opportunities in the West and supply customers with window products nationwide, executives said.
The window and door business that Ply Gem purchased has three plants -- in West Sacramento, Corona, and Auburn, Wash.
A Pennsylvania-based building materials manufacturer, CertainTeed also makes other building materials, such as roofing, vinyl siding and insulation. That portion of the business was not included in the sale. Before the acquisition, the company had about 9,000 employees and 70 plants. It posted sales of almost $4 billion in 2006, company spokesman Mike Loughery said.
"CertainTeed's decision to sell was strategic in nature and done to support future, yet undetermined, investment opportunities," Loughery wrote in an e-mail.
The city of West Sacramento courted CertainTeed, which opened its plant in the city in 2004. The plant initially employed 120, with plans to employ 500 by 2009.
Last year, CertainTeed laid off a handful of local employees, said Kurt Overmeyer, an economic development analyst with the city of West Sacramento.
"I'm surprised to hear that they've been bought out," he said, adding that it's good news the company won't be closing its local plant. "They have room to almost double their manufacturing line without running out of space."
Diane Richards, economic development coordinator for the West Sacramento Redevelopment Agency, said the company's original projections called for 300 employees by 2007. Today the plant employs 150. Richards speculated that CertainTeed has been affected by the housing market.
For now, company officials say the plant will grow.
"We see the sale as an immediate opportunity to (grow)," said Steve Hewson, vice president of sales for CertainTeed.
The only change was a new senior leader, Klein, who replaces the president of CertainTeed Pacific Windows.
Klein said the company plans to invest in products, new manufacturing equipment and personnel. "We're very excited now to be in a position to go in and make those additional investments," he said.
The West Sacramento plant has been the fastest-growing among all CertainTeed-owned businesses, Klein said.
Sales growth for the West Sacramento facility has been in excess of 40 percent per year for the past two years, he said.
Neither CertainTeed nor Ply Gem officials would reveal revenue figures for the local operation. Klein predicted it would continue to grow in excess of 40 percent per year, despite a downturn in construction.
Pete Cavolt, chief executive officer for Cavolt & Sons Glass & Windows in Rocklin, has been doing business with CertainTeed for five years. CertainTeed has replaced Milgard Windows Inc. as his top supplier.
When CertainTeed first opened its doors in West Sacramento, Cavolt said there were some "hiccups." But "right now they're probably one of the best" in terms of the quality and on-time deliveries, he said.
"It comes out the way you need it, straight and in good shape," he said.
Despite the housing slump, Cavolt said he's busy. "There's still plenty to do," he said. "It's not like the industry has fallen off the face of the earth."
Cavolt has quadrupled the business he did with CertainTeed five years ago. Last year, he reached $300,000 in business with the company.
"I think it'll all be for the better," Cavolt said of the CertainTeed purchase.
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