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Masco attracts investors to cabinet unit: Bloomberg
Posted on Wednesday, 21 August 2019 13:56
Masco, a building supplies and home improvement company, is working on a disposal of its cabinetry business that has already attracted private equity firms and is likely to be worth around USD 1.20 billion, Bloomberg reported, citing people familiar with the matter.
These sources noted that Bain Capital, American Industrial Partners, Clearlake Capital Group and WW Grainger have all made it to the second round of bidding for the division.
Some insiders cautioned there can be no guarantee of an agreement being reached, while others asked not to be identified as the situation is still private.
Masco hired advisors to review strategic options for both its cabinet and windows operations back in March.
At the time, chief executive Keith Allman, said: “Over the past five years, we have been executing our strategy to drive the full potential of our core businesses, leverage opportunities across our organisation, and actively manage our portfolio to drive shareholder value.
“Our cabinetry and window businesses are leaders in their respective markets and are well positioned to continue their growth. However, we believe we can potentially drive greater shareholder value by exploring strategic alternatives for these businesses. We expect to complete this review by the end of June.”
In June, the group announced it will pursue a sale of these operations in a three-way split: Masco Cabinetry, Milgard Windows and UK Window Group.
The unit currently being eyed by private equity investors, according to Bloomberg, is headquartered in Michigan and manufactures and sells semi-custom, stock and value-priced cabinets for kitchens, bathrooms, storage, home offices and home entertainment.
Its products are primarily sold to dealers and homebuilders and in 2018 the division generated earnings before interest, taxes, depreciation and amortisation (EBITDA) of USD 99.00 million on net sales of USD 950.00 million.
During the six months to 30th June 2019, the cabinetry products unit posted EBITDA of USD 63.00 million on net sales of USD 488.00 million, accounting for 8.9 per cent and 11.7 per cent, respectively, of Masco’s total EBITDA and net sales for the same timeframe.
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