EFCO is a leading U.S. manufacturer of architectural aluminum window, curtainwall, storefront and entrance systems for commercial construction projects. Apogee provides distinctive value-added glass and metal solutions for the architectural and picture framing industries.
“We are excited to begin the process of integrating EFCO into the Apogee family and realizing the benefits the acquisition will bring to Apogee and to the EFCO business,” said Joseph F. Puishys, Apogee chief executive officer.
“Our acquisition of EFCO, with annual revenues of more than $250 million, will accelerate Apogee’s growth strategies, and expand our presence in mid-size commercial buildings, broaden our product offerings and increase our geographic presence across the United States. To summarize, with the addition of EFCO, we’ve achieved another milestone in our journey to position Apogee to deliver consistently solid performance regardless of economic conditions.
“In addition, EFCO operates in a space we know and structurally has similar operations to those across the Apogee businesses,” he said.
“These similarities should benefit both Apogee and EFCO as we share best operational practices, including in productivity, Lean and supply chain, and work to capture $10 to $15 million in annual synergies by fiscal 2020. We also see significant margin enhancement opportunities as we leverage Apogee’s scale and build on initiatives already being implemented by EFCO’s strong management team, which is continuing to lead the business.
“EFCO is a growing and profitable company, and in fiscal 2018, we expect the acquisition will add $200 to $220 million to Apogee’s revenues and be accretive to Apogee’s EBITDA and earnings per share, excluding transaction-related costs,” said Puishys.
“We are pleased to be joining the Apogee family, and feel Apogee is an ideal parent company for EFCO and our employees,” said Cameron McGinley, EFCO president.
“We are looking forward to working with Apogee to capitalize on product, market and operational opportunities for EFCO. We will be collaborating with Apogee on strategic plans to grow EFCO and continuously improve operations.”
Apogee funded the EFCO acquisition through expansion of its existing credit facility. EFCO is a ninth independent operating unit in the Apogee portfolio and is reported as part of the architectural framing systems segment.
Apogee’s first quarter outlook, which does not include any revenues or earnings from EFCO, is for revenue growth of approximately 10 percent and for earnings per diluted share to be down approximately 10 percent compared to the prior-year period, as expected.
First-quarter results will be impacted by the expected and previously discussed first-half revenue decline for the architectural services segment, as well as transaction-related costs from the Sotawall and EFCO acquisitions.
The longer-term outlook for the architectural services segment continues to be positive, following a substantial increase in segment backlog in the fiscal 2017 fourth quarter, combined with significant backlog growth expected in the fiscal 2018 first quarter and further expansion anticipated in the second quarter.
This backlog growth supports architectural services segment revenue growth in fiscal year 2019 and beyond.
Excluding the impact of the EFCO acquisition, the company reaffirms its stated fiscal 2018 full-year outlook for approximately 10 percent revenue growth and earnings of $3.35 to $3.55 per diluted share.
Apogee will incorporate EFCO’s expected impact on fiscal 2018 full-year results when it releases first-quarter earnings on June 22.