For Sale: Masco’s cabinet and window businesses

Manufacturer says it wants to reduce its exposure to new construction market.

BY HBSDealer Staff

Following a strategic review of its portfolio, Masco Corporation announced this morning that it plans to sell its window and cabinet businesses.

Nearly two months ago, the Livonia, Mich.-based home improvement products manufacturer announced that it was exploring alternatives to its cabinet and window businesses.

“Since we announced the strategic review of our Cabinetry and Windows businesses in March, we have worked with our external advisors, our cabinetry and windows business units, and our board of directors to evaluate alternatives to best deliver long-term value for our shareholders,” said Keith Allman, Masco president and CEO.

Allman said that the company has determined that pursuing the sale of Masco Cabinetry, Milgard Windows and UK Window Group in three separate transactions is “the most appropriate path forward to accomplish this value creation.”

A sale is expected to be completed within the next six to nine months, according to the chief executive.

In the past five years, Masco has looked to increase its exposure to the repair and remodel segment of the housing market. The approach began with the spin-off of Masco’s installation services business and continued with a focus on improving the operations of its cabinetry and windows businesses.

Allman explained that the latest actions completes Masco’s process of reducing its exposure to the new construction segment of the market “and position us to focus on our less cyclical plumbing products and decorative architectural products businesses going forward.” concluded Allman.

For 2018, the cabinetry, windows and “other specialty products” segments combined for $1.7 billion in net sales and $120 million in operating profit. The segments represent about 20% of Masco’s consolidated net sales and 10% of its consolidated operating profit.

For its most recent fiscal year, Masco reported that net sales rose more than 9% to $8.36 billion from 2017 net sales of $7.64 billion. But cabinetry products sales increased just 1% in the fourth quarter of 2018 while windows and other specialty products’ sales fell 1%.

Masco Cabinetry, headquartered in Ann Arbor, Mich., manufactures and sells semi-custom, stock and value-priced assembled cabinetry for kitchen, bath, storage, home office and home entertainment applications. Brands include KraftMaid and Cardell products, which are sold primarily to dealers and home center retailers, and its Merillat and Quality Cabinet products aimed at dealers and homebuilders. For 2018, Masco reported net sales of its $950 million for its cabinetry products segment.

Masco’s two window businesses are Milgard Windows and Doors, headquartered in Tacoma, Wa., and UK Window Group, headquartered in Wales in the United Kingdom. Milgard manufactures and sells vinyl, fiberglass and aluminum windows and patio doors for home improvement and new home construction, principally in the western United States. The UK Window Group manufactures and sells vinyl windows, composite doors, related products and components under several brand names. For 2018, Masco reported net sales of its windows and other specialty products segment of $755 million.

Masco’s other businesses and brands includes Behr paint; Delta and Hansgrohe faucets, bath and shower fixtures; Kichler decorative and outdoor lighting; and HotSpring spas.



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