Denmark's VKR Acquires Gienow Operations in Alberta

November 3, 2009

VKR Holding A/S has purchased the Western Canadian operations of the Gienow Group from Sankaty Advisors LLC. Denmark-based VKR Holding is the parent company of Velux, the manufacturer of skylights with operations in the U.S. and throughout the world.

VKR is acquiring the Gienow, Award and AWD business units, which employ about 650 people and operate three window and door manufacturing facilities in Calgary and Edmonton, Alberta. The transaction does not include Farley Windows & Doors of Alexandria, Ont.  Previously part of the Gienow Group, Farley  remains a portfolio investment for Sankaty Advisors.

“This is a great opportunity for us and our employees to provide a platform for stability and continued growth,” says Richard Boyer, president of Gienow's Western Group.  Over the past four years, he notes, finacial investors have held a significant stake in Gienow.  "This puts us back in the hands of a private company with a long-term perspective," he states, adding that being part of a large group on solid financial footing is "a good thing."

None of the current operations or plans made by management are expected to change as a result of this transaction. “VKR was looking for a strong and viable platform to enter the Canadian market," Boyer states. "We have a lot in common and have a shared vision about our future.”

”We are an industrial owner with a long-term perspective," says Leif Jensen, CEO of VKR Holding. "We already own several vertical window companies and other companies. Therefore, the acquisition is consistent with our strategy to increase our activities outside Western Europe. We consider the Gienow Group a company with a good position on the Canadian market.”

With 2008 sales of about $3.7 billion, the VKR Group is active in more than 40 countries and employs approximately 15,000 people. Its Velux Group employs about 10,000 people and operates manufacturing operations in 11 countries, including the U.S., where it has a plant in Greenwood, S.C.

In addition to the skylight and roof window business, VKR also owns the Dovista Group of window and door manufacturing companies. Primarily targeting Northern European markets, the 10 companies primarily make wood and wood/aluminum products, operating manufacturing plants in Denmark, Norway, Poland, Sweden and the UK.  Dovista brands include Velfac, Rationel Vinduer, SP Fönster, Traryd Fönster, Mockfjärds Fönster, West Port,  the Natre Group, O.H. Industri and Snidex. VKR also owns a number of manufacturers involved solar and thermal energy products, screens and  blinds, and ventilation products.

"The Canadian market is a new market for us, but the climate and business conditions are similar to the Northern European conditions, so we feel well prepared," Jensen states. "Currently, the Canadian market is just as difficult as the European markets, but we consider the Gienow Group a company with a good regional position on the Canadian market and with promising potentials on the other side of the present crisis."

Looking long term, Boyer notes that being part of VKR will offer some procurement opportunities, given the company's global footprint not only in vertical windows, but skylights.  With its wood and aluminum/wood product lines, he also expects some technology transfer, as well as sharing of best practices. VKR's window and door operations have little experience with vinyl, Boyer adds. Given Gienow's experience in that realm, he expects Gienow may be able to share its expertise on that front.

The Gienow Group had operated as a publicly-traded income trust for several years until 2007, when it went private with an investor group that included H.I.G. Capital, as well as Sankaty Advisors. Sankaty acquired a controlling interest in Gienow when it made a significant investment in the window and door company as part of a restructuring process earlier this year.