NCI Building Systems and Ply Gem Announce Merger

NCI Building Systems Inc., a manufacturer of exterior building products for commercial construction, and Ply Gem Parent, LLC, a manufacturer of exterior building products for residential construction, announced today that they have signed a definitive agreement under which the two companies will combine in a stock-for-stock merger. The combined company will operate under a name to be determined, and each entity will preserve its existing established brands. The company will be headquartered in Cary, North Carolina, with a significant presence in Houston, Texas. The combined company will have a pro forma enterprise value of $5.5 billion and an implied equity value of $2.6 billion, based on NCI’s closing share price on July 17, 2018.

NCI Chairman James S. Metcalf, who will lead the integration of the two companies and serve as Chairman and CEO of the company, said: “This transformational combination creates the leading exterior building products company with multiple avenues for further growth. Both companies are experiencing sustained momentum driven by meaningful cost savings, and the greater scale and diversification of the combined company support organic growth, margin expansion and longer-term M&A opportunities. With a greater ability to attract and retain top talent in all fields, our combined company will continue to innovate in the exterior building products space — far beyond what either of us could do alone.”

The transaction will create a North American exterior building products platform providing new construction and repair and remodel solutions for commercial and residential applications. As a larger, vertically-integrated manufacturer with enhanced growth opportunities through adjacent products, the combined company will become a one-stop solution for exterior building envelope needs.

Ply Gem Chairman and CEO Gary E. Robinette, who will continue to serve in this role until close, said: “I am grateful and honored to have had the opportunity to lead Ply Gem over the past 12 years and I am proud of our team’s accomplishments during the past decade of successes and challenges. The joining of these two market-leading exterior building products companies creates a platform for growth, enhanced innovation and cost improvements, while serving all channels of the construction markets. I am excited for the associates and customers of the combined company and the next evolution of this best-in-class provider of exterior building envelope solutions.”

NCI CEO Donald Riley, who will continue to serve in this role until close, noted: “This scalable platform is well-positioned to create shareholder value through improved margins, additional cost savings and expanded market penetration. The opportunity for growth through cross-selling and adjacencies to each other’s customers is a major advantage of this transaction. Furthermore, both of our companies are strong in new construction and Ply Gem also excels at repair and remodel, adding to our combined end market diversification and providing further room for growth.”

Financial Highlights, Management

Under the terms of the agreement, NCI will issue 58.7 million shares to Ply Gem shareholders. Upon the close of the transaction, NCI shareholders will own 53 percent of the company’s common equity, with Ply Gem shareholders owning 47 percent. The transaction is generally expected to be tax-free to the Ply Gem owners for U.S. federal income tax purposes.

On a combined basis for calendar year 2018, the company is expected to generate revenue of approximately $4.5 billion and Pro Forma Adjusted EBITDA of $660 million-$680 million, including run-rate synergies and cost savings. The company expects that, after three years following close, cost reduction initiatives and merger-related synergies will yield over $150 million in annual cost savings. Combination-specific synergies include manufacturing efficiencies and procurement and general & administrative savings. The transaction is expected to be immediately accretive to adjusted cash earnings per share and free cash flow.

James S. Metcalf, current Chairman of NCI, will become Chairman and CEO of the combined company. Metcalf served as Chairman and CEO of USG Corporation from 2011 to 2016 and joined the NCI Board in 2017 and became Chairman in 2018.

Donald Riley, current CEO of NCI, will serve as CEO of the company’s NCI Division. Gary Robinette will continue to serve as President, Chairman and CEO of Ply Gem until the transaction is completed, after which he will serve as Chairman Emeritus and Special Advisor to the company. Shawn Poe, current CFO of Ply Gem, will serve as CFO of the company.

Funds managed by Clayton, Dubilier & Rice (CD&R) will own just under 50 percent of the company’s common equity and will designate five directors to the company’s 12-person Board of Directors. Golden Gate Capital, a significant shareholder of Ply Gem, will own approximately 16 percent of the company’s common equity.

“We believe the merger creates attractive and profitable new growth avenues in the North American exterior building products market for the combined company,” said Nathan K. Sleeper, Partner at CD&R, who will serve on the Board of Directors of the company. “There is an enormous value creation opportunity in joining these two industry leaders in terms of delivering operational synergies and enhancing the platform to better serve the company’s customers, broaden its product portfolio, drive innovation and pursue significant opportunities for organic and inorganic growth. We look forward to working with and supporting the management team to realize these goals.”

The transaction has been unanimously approved by a special committee of independent directors formed by NCI’s Board of Directors and by NCI’s full Board (without participation of directors affiliated with CD&R, NCI’s largest shareholder).

The transaction is expected to close in the fourth calendar quarter of 2018, subject to approval by NCI shareholders and customary regulatory approvals.

For more information, visit www.ncibuildingsystems.com and www.plygem.com.

MBCI Houston Plant Hosts National Manufacturing Day

Congresswoman Sheila Jackson presents NCI a flag that was flown over the U.S. Capital building and a Certificate of Congressional recognition during National Manufacturing Day.

Congresswoman Sheila Jackson presents NCI a flag that was flown over the U.S. Capital building and a Certificate of Congressional recognition during National Manufacturing Day.

In celebration of National Manufacturing Day 2016, NCI Building Systems Inc. (NCI) opened three of its manufacturing facilities to the public, including its MBCI manufacturing facility in Houston.

More than 300 people participated in MBCI’s Manufacturing Day activities, which included facility tours, presentations from company and community leaders, a question-and-answer session and a catered lunch to participants as part of an ongoing effort to promote the strength of U.S. manufacturing and increase awareness of the outstanding career opportunities in the field. The tours showcased a working plant featuring MBCI designers, programmers and technology operators who each play a role in manufacturing the products our communities and industries rely on.

Students from Cold Springs – Oakhurst and Sealy ISDs, and professionals from The Lucas Group, Ernst & Young and The Welding School heard presentations given by NCI President, Don Riley and NCI Vice President of Manufacturing, Carlin Mueller, as well as Congressman Gene Green (TX-29) and Congresswoman Sheila Jackson-Lee (TX-18). The messages delivered focused on the career and growth opportunities available in manufacturing, with Jackson-Lee sharing her views on the role of the industry in building the US economy, saying “I am excited about that fact that you are, in essence, recognizing the importance of acknowledging to America that we need to make things with our hands.”

Further emphasizing the importance of the work done by manufacturing companies like MBCI, NCI was presented a United States flag that was flown over the U.S. Capital building and a Certificate of Congressional recognition on the occasion of National Manufacturing Day by Jackson-Lee.

METALCON 2016 to Present Ideas for Metal in Construction

Learning opportunities at METALCON 2016 offer an extraordinary look at the future while presenting ideas to improve today’s safety, productivity, communication and the finished project.

As part of this year’s show from Oct. 26-28 at the Baltimore Convention Center, METALCON is offering two unique general sessions featuring 3-D technology. On Oct. 26, Roderick Jackson from Oak Ridge National Laboratories demonstrates how a natural gas-powered hybrid vehicle and a solar-powered house are linked to create an integrated energy system ―both built using large-scale 3-D printers. On Oct. 27, architect and innovator Adam Kushner takes this type of 3-D additive manufacturing to another step demonstrating how it’s used in building projects and why it could soon become mainstream.

METALCON Show Director Claire Kilcoyne is thrilled to have these speakers on board. “We’ve heard about combining new technologies but now see that it’s real,” says Kilcoyne. “Companies in our industry have always been on the leading edge and with this technology, can evaluate other high-tech applications.”

The 45-minute sessions following the general sessions demonstrate existing applications of this technology, along with ideas for better management, marketing, products and techniques to improve metal buildings.

Advances in drones and associated benefits for safety and accuracy on construction projects are covered by Mark Sapp, Chief Technology Officer of HoverStat Technologies in “Safety Above All, Thanks to Drones.” Tom Dyskiewicz of Crossing Partners LLC and Chris Hewson, national account manager for iRoofing, discuss the future direction of roof technology and its impact on metal roofing businesses in “Roofing Technology for Today and Tomorrow.” Ray Smith of AppliCad USA Inc, also takes on roofing technology with a session focused on the importance of planning before installing or upgrading software. Technology and its value in marketing and sales lead conversion are explained by Lance Bachmann of 1SEO.com Digital Agency in “Using Digital Marketing to Build Your Future in the Metal Industry.”

In addition to a focus on technology this year, business success is covered in several sessions including “Grab the Future and Lead” with Frank Stasiowski, of PSMJ Resources, Inc. In this fast-paced session, participants learn how to move a business forward using realistic strategies. Dave Berry, a consultant with FMI, offers “Emerging Trends for Contractor Success,” and details what makes a company successful and how to build a business fit for future challenges.

Training and development are among critical business topics covered. Steve Yates of Optimum Safety Management leads participants in how to develop a workable safety program in “Building a Safety Culture That Lasts.” Peter Gudmundsson of RecruitMilitary explains the facts and best practices for accessing the amazing resources of U.S. veterans in “Understanding the Real Veteran Hiring Opportunity.”

Metal construction experts discuss best practices and attributes of metal roofs, windows, wall panels and building inspections. Rob Haddock, Metal Advisory Group, deals with the reality of “The Roof: The Greatest Asset (or pain-in-the asset) to the Building.” Bob Zabcik of NCI talks about “Choosing Wall Panels for Sustainability and Energy Efficiency,” and Adam Verstraete of Wintech and Rick Kincy of Dominion Building Products offer new insight on a common building aspect in “Window Options for Metal Buildings Are Changing.” The big picture for all metal building projects is presented in “Metal Building Inspection – Don’t Get Caught Off Guard,” an interactive session with an expert panel led by Dustin Cole of Ruffin Building Systems.

Two programs kick-off before METALCON opens. The first is a unique offsite tour on Oct. 25, at Intertek Building & Construction’s testing laboratory in York, Penn. This is a once-a-year chance to see product testing firsthand and learn more about testing and certification. The second is the Metal Roof Certification Training Program, which runs on October 25 and 26. Participants in this 8-hour session will have practical, hands-on training based on the Metal Construction Association’s Metal Roof Installation Manual, and become certified in proper methods of metal roof installation. Details of all education offerings at METALCON, as well as online registration can be accessed at www.metalcon.com.

NCI Metal Depots Opens Raleigh, N.C., Location, Grand Opening Wednesday, Feb. 12

NCI Metal Depots, a national network of retail outlets providing metal buildings and roofing to everyone from homeowners to contractors, recently opened a store in Raleigh, N.C., at 5115 New Bern Ave.

Metal Depots offers a wide range of products ideally suited for residential, commercial and agricultural applications. The showroom offers consumers an opportunity to browse its many offerings as well as work in the design center to create the perfect roof for their home or a new building for their property.

Chris Pettis, vice president of Metal Depots, says, “Raleigh was the perfect site for us to open a new store. The market is here, and the people that we’ve worked with thus far have been fantastic, which gives us a positive outlook. We’re really looking forward to providing a unique shopping and buying experience for our customers, something that is not typical in our industry.”

Metal Depots is currently open to the public and will be having its Grand Opening on Wednesday, Feb. 12. Stop by during the hours of noon to 2 p.m. EST for a chance to win some great prizes.

NCI Metal Depots is an NCI Group Inc. company, which has headquarters in Houston. With 37 manufacturing facilities located throughout the U.S., Canada and Mexico, NCI is one of the largest designers, manufacturers and vendors of metal coatings, components and buildings in North America.