PGTI Inks Deal to Acquire NewSouth Window Solutions
December 17, 2019
PGT Innovations Inc. signed a definitive agreement to acquire NewSouth Window Solutions for a purchase price of $92 million in cash, subject to adjustments. The transaction is expected to be completed in the first quarter of 2020, subject to customary closing conditions.
PGTI reports that the move enables the company to enter the direct-to-consumer channel and, as such, PGTI expects the transaction to support its diversification into growing segments in the window and door industry. The addition underscores PGTI’s strategy to grow in geographic areas outside of its core markets.
“We are excited to be joining the NewSouth team with PGT Innovations and are thrilled to become part of the PGT Innovations family,” says Earl Rahn, CEO of NewSouth. “After successfully executing our growth plan in Florida, we expect this combination to provide growth opportunities to better serve the southern coastal markets and beyond.” NewSouth will retain its name following the acquisition and will still make its own products, according to the Tampa Bay Times. NewSouth executives don’t expect the acquisition will result in cutting personnel, the Times reported.
NewSouth has eight retail showrooms in several locations throughout Florida, with an additional showroom in Charleston, South Carolina, and is the only vertically integrated window dealer in Florida, according to a PGTI release.
“NewSouth’s direct-to-consumer model is supported by its showrooms and in-home sales,” explains Jeff Jackson, president and CEO. He expects the acquisition to provide PGTI with the opportunity to “serve a broader residential market segment, primarily driven by replacement projects and relatively smaller order sizes that PGT Innovations’ strong dealer network typically does not target or serve.”
According to Sherri Baker, PGTI senior vice president and CFO, NewSouth has a strong track record of sales growth and is forecasted to achieve net sales for 2019 in the range of approximately $82 million to $85 million, with retail margins similar to PGTI’s legacy business, including solid margins in NewSouth’s non-impact product line.