Nucor Corporation announced that it has entered into an agreement with an affiliate of investment funds managed by Kohlberg Kravis Roberts & Co. L.P. to acquire C.H.I. Overhead Doors (C.H.I.), a manufacturer of overhead doors for residential and commercial markets in the United States and Canada.
The transaction is valued at $3.0 billion, which represents approximately 13x C.H.I.'s estimated trailing 12-month EBITDA at close. The transaction is expected to close in June or shortly thereafter, pending regulatory approvals and customary closing conditions, and be immediately accretive to earnings in its first year of ownership.
C.H.I. manufactures overhead door products for residential and commercial applications, as well as rolling steel and rubber doors for commercial and industrial customers. The company has approximately 800 teammates across two manufacturing plants in Arthur, Illinois, and Terre Haute, Indiana, and regional warehouses located in California, Colorado, New Hampshire and New Jersey. With a highly diversified national customer network of professional garage door dealers, C.H.I. is able to maintain minimal inventory levels and realize industry-leading fulfillment times, while providing direct delivery to customers.
In a press release, Nucor said the overhead door market is a growing $5 billion market that has both residential and non-residential exposure through new builds and repair and remodel applications. Commercial overhead doors are used in warehousing and retail, areas that Nucor has focused its attention recently through other value-added products such as insulated metal panels (CENTRIA, Metl-Span and TrueCore brands) and steel racking solutions (Hannibal Industries and Elite Storage Solutions). It is expected that the C.H.I. acquisition will also benefit from Nucor's recent paint line investments at its Hickman, Arkansas, and Crawfordsville, Indiana, sheet mills.
In a statement, Leon Topalian, Nucor’s President and CEO said, "Acquiring C.H.I. allows Nucor to further enhance its already diverse range of businesses that provide end market solutions to the construction and infrastructure markets. As with the acquisitions Nucor made in the past year in insulated metal panels and racking, C.H.I. increases the overall long-run value of the organization with businesses that have strong free cash flow characteristics, robust growth prospects and fit with Nucor's capabilities."