CAMBRIDGE, Ohio—Quanex Building Products Corp. is buying Lauren International's Edgetech I.G. Inc. subsidiary, a producer of elastomeric insulating glass spacer systems for window and door manufacturers, for $107 million cash.
Quanex plans to close the deal April 1, as it has cleared the routine federal antitrust investigation, said Edgetech President Michael B. Hovan.
The purchase includes Edgetech's headquarters plant in Cambridge as well as its facilities in Coventry, England, and Heinsberg, Germany.
Edgetech moved into its Heinsberg facility in December 2010, according to Hovan. The 47,000-sq.-ft. plant has enough land to allow it to nearly double its size.
“I believe that the international infrastructure was an attractive piece for Quanex in the Edgetech acquisition,” he said.
The purchase doesn't include LMI Custom Mixing, which is adjacent to Edgetech's Cambridge headquarters but not part of Edgetech. LMI is a separate joint venture between Lauren International and Meteor Gummiwerke in Germany, Hovan said.
Edgetech has maintained a steady increase in revenues over the past few years, even in the midst of a global downturn, according to Hovan. Without giving exact figures, he said the company's revenues increased 8.2 percent in 2006, 9.3 percent in 2007, 1.5 percent in 2008, 4.2 percent in 2009 and 15.5 percent in 2010.
So why did Lauren divest it?
“Every company needs to continue to evolve, and I believe that Lauren International felt that the appropriate next step for Edgetech was with a bigger brother,” Hovan said. “Someone that had the wherewithal to take Edgetech to the next level.”
The potential synergies between Quanex and Edgetech, Hovan said, makes their merger a “1+1=3” opportunity for both companies. The combined intellectual capabilities of the two companies offer vast oppor- tunities to create new products and services for the window and door industries, he said.
“The Truseal Division of Quanex has a number of ma- terial technologies that, in combination with Edgetech, can lead to some interesting product possibilities,” he said.
“Also, the products in the Quanex divisions of Mikron and Homeshield can be excellent potential value-added offerings to the Edgetech customer base.”
Currently, Edgetech employs about 260 worldwide. “We hope that this number will change dramatically after the Quanex purchase,” Hovan said. Quanex said it is committed to Edgetech's growth during the next few years, he said.
Based in Houston, Quanex makes engineered materials, components and systems for the U.S. residential window and door markets. It entered that market with its acquisition of Nichols Homeshield in 1989, expanding its holdings with the purchase of Colonial Craft in 2002, Truseal in 2003, and Mikron in 2004.