PGT Innovations Acquires Martin Door; Expands Into Garage Door Market
PGT Innovations Inc. has acquired Martin Door Holdings Inc. for a purchase price of approximately $185 million. Martin is headquartered in Salt Lake City, Utah, and is a custom manufacturer of premium overhead garage doors and hardware serving the Western U.S. residential and commercial markets.
This transaction is consistent with PGT Innovations’ continuing move into adjacent building product categories that complement its current portfolio of strong window and door brands. The expansion of product categories, along with the breadth of markets currently served by Martin, supports PGT Innovations’ strategic plan to scale its business and grow in desirable markets and geographies, according to a news release. The addition of Martin’s brand also further strengthens the company’s market presence across the growing Western region, an area currently served by two of PGT Innovations’ window and door brands – Western Window Systems and Anlin Windows & Doors.
“PGT Innovations has been expanding our geographic footprint and product portfolio over the past several years with great success,” says Jeff Jackson, president and CEO of PGT Innovations. “This transaction continues that trend and brings us into a new market of garage doors. As we looked to expand beyond our existing window and door market, we wanted to ensure we could leverage our team’s extensive knowledge in the area of protecting the envelope of homes and buildings. The garage door entry market aligns extremely well with that strategy. Additionally, Martin’s focus on exceptional quality, safety of their products, and innovation within their industry mirrors the priorities found across all of our PGT Innovations brands, making it, culturally, a perfect fit.”
Demand for Martin’s customized products along with its efficient cost structure allow the company to achieve EBITDA margins in excess of 30 percent, while generating strong cash flow conversion. Martin has introduced multiple new product lines, doubled its dealer base, and improved margins while also investing for growth via automation and capacity expansion, according to the company.
Martin will operate under the Western Division of PGT Innovations. Martin’s CEO Scott Huntsman will remain with the company and assume the role of President of Martin Doors. Through this reporting structure, the PGT Innovations team will collaborate with the Martin team to share best practices that may benefit the organization as a whole.
"Martin’s team brings a wealth of industry knowledge and has generated impressive top-line and bottom-line growth,” continues Jackson. “I am very pleased that Martin’s leadership will remain with the company and be available to collaborate with our Western Division leaders on how we can best serve our customers, provide new opportunities for team members, and drive shareholder value. I am excited to welcome the 173 Martin team members to our PGT Innovations family, and I look forward to our folks serving, leading and thriving together.”
“PGT Innovations’ long-standing focus on innovation, safety and quality, as well as their exceptional dedication to their team members, made the decision to join their family of brands an easy one,” says Huntsman. “We are honored that the group saw similar qualities in our team and selected Martin to be the brand to help them enter into the overhead garage door industry. We are excited to work with the PGT Innovations team to advance further our manufacturing capabilities and serve as their flagship brand in the garage door product category. This transaction would not have been possible without the incredible efforts of innumerable people – from our passionate employees to our loyal dealers, and dedicated vendors who worked in synchrony to bring Martin to the company it is today. The support we received from every side was amazing, and I look forward to a long and successful continued relationship with each of these partners. We also would like to thank Black Oak Capital and Ridgeline Capital, for their support over the past several years helping us achieve the growth we have seen in recent years.”
PGT Innovations entered into a new, five-year, $250 million Revolving Credit Facility that will be utilized, along with cash on hand, to fund the transaction, as well as extend maturities and create more liquidity to support our continued growth.
Martin is expected to generate approximately $60 million in sales during 2022, according to a news release. PGT Innovations paid a forward 2022 multiple of approximately 8.5x pre-synergies and expects the transaction to be accretive.
“On a pro forma basis, as of the end of the second quarter of 2022, PGT Innovations had a trailing-twelve-month net debt-to-adjusted EBITDA ratio of 2.6 times,” says John Kunz, senior vice president and chief financial officer. “Consistent with our priority of maintaining a strong and flexible balance sheet, we anticipate that reducing leverage after acquisitions will remain a capital allocation priority.”
