Ply Gem Plans to Go Public

June 1, 2010

Filing with the Securities and Exchange Commission last Friday, Ply Gem Holding Inc. is planning an initial public offering.  The manufacturer of exterior building products is looking to raise as much as $300 million, according to the S-1 document filed, although the expected price per share or number of shares to be sold are not indicated.

Based in Cary, N.C., Ply Gem states it is the second largest manufacturer of vinyl and aluminum windows in the U.S. and the number one producer of vinyl siding.  Although it markets products under the Ply Gem brand now, its window and door operations encompass what were once Great Lakes Window, MW Windows & Doors, CWD Window & Doors and parts of CertainTeed Corp.  

Currently, Ply Gem is owned by Caxman-Iseman Capital Inc. The New York-based private equity firm initially acquired the window, door and siding operations of Nortek Inc. in 2004, and later expanded the operation with further acquisitions.  For 2009, Ply Gem reported sales of about $950 million, with windows and doors said to represent about 40 percent of the total.

In the SEC document, Ply Gem states it is pursuing a number of growth strategies.  "As a leading manufacturer of exterior building products, we intend to capitalize on the recovery in new construction and home repair and remodeling," officials note. "The 2009 level of 441,000 single family housing starts was approximately 60 percent below the 50 year average, representing a significant opportunity for growth as activity returns to historical levels. Furthermore, we believe that the underinvestment in homes during the recent recession and the overall age of the U.S. housing stock will drive significant future spending for home repair and remodeling."

Ply Gem also intends to increase market penetration "by leveraging the breadth of our product offering and broad geographical footprint to serve customers across North America," executives report. The company estimates it increased its share of total unit sales of U.S. vinyl and aluminum windows for new construction from approximately 17 percent in 2008 to 24 percent in 2009. "In 2010, we will be introducing a new line of vinyl windows under our Ply Gem brand as well as under our Mastic Home Exteriors brand, historically associated with vinyl siding products, that will be marketed and sold by our vinyl siding sales force, a first for Ply Gem," it is noted. "We believe that this demonstrates the substantial opportunity across our product categories to continue to cross-sell and bundle products, thereby increasing revenues from our existing channel partners and industry relationships."

Finally, the company also foresees further opportunities in production and operational efficiencies. "While we reduced our production capacity during the past several years, we have retained the flexibility to increase our production as market conditions improve," officials note. "In our windows and doors segment, where we have historically focused on new construction, we believe that our new window products for home repair and remodeling will be able to drive increased volumes through these manufacturing facilities and enhance operating margins."

A date for the IPO has not been determined.  With the public offering, the company plans to be listed on the New York Stock Exchange under the symbol, PGEM.