Jeld-Wen selling Australasian division for $461 million
Jeld-Wen Holding, Inc. announced that it has completed a comprehensive review of strategic alternatives for its Australasia business.
As a result, the Charlotte, N.C.-based window and door manufacturer has entered into a definitive sale agreement with Platinum Equity to sell 100% of the business for approximately $688 million Australian dollars (approximately US$461 million) before tax and subject to certain adjustments.
"Today's announcement marks continued execution against our strategy to streamline and simplify our business and maximize shareholder value," said William Christensen, Jeld-Wen CEO. "I want to personally thank our Australasia team for their hard work and dedication to serving customers. We look forward to working with Platinum on executing a seamless transition for the business."
Jeld-Wen said that it intends to use the majority of the proceeds from the transaction to pay down debt. The company plans to update full-year guidance on its first quarter earnings call, scheduled for May 9. The Australasia business will be reported as discontinued operations beginning in its second fiscal quarter.
In February, Jeld-Wen reported that its net revenue for the full year moved ahead 7.5% to $5.12 billion, compared to $4.77 million for 2021, including 12% core revenue growth.
But the manufacturer’s net income for the full year dropped drastically to $45.7 million compared to $168.8 million in 2001. The manufacturer said its net income for 2022 included after-tax charges of $100.8 million.
Net revenue at Jeld-Wen’s Australasian business decreased $4.7 million, or 0.8%, to $585.4 million in 2022. The division’s net income decreased $6.8 million to $25.4 million for the fiscal year.
Jeld-Wen’s Australasia business represents approximately 11% of the company's global revenues and is the leading Australian designer, manufacturer, and distributor of windows and doors.
Platinum Equity Co-President Louis Samson and Platinum Equity Managing Director Adam Cooper said in a joint statement, "We are excited about the prospects for the Australasia business. Platinum has decades of experience with corporate carve outs, helping establish standalone companies that can maximize their potential. With our experience in Australia, our knowledge of the building products space, and our carve out expertise and operational capabilities, we look forward to helping the business navigate a dynamic housing market. This investment is right in our wheelhouse."
Jeld-Wen’s Australasian business employs roughly 5,000 people and comprises 41 manufacturing locations across Australia, Malaysia and Indonesia. Its brands include Corinthian, Stegbar, and Breezway, among others.
The transaction is expected to close in the third quarter of 2023, subject to certain closing conditions and regulatory approvals, Jeld-Wen said.
This latest move follows recent big executive moves at Jeld-Wen. Last August, Gary Michel resigned as chairman and CEO with the company appointing Kevin Lilly as interim CEO.
In December, Jeld-Wen named William (Bill) Christensen as its new CEO in a move that was effective immediately at the time. Christensen also joined the company’s board of directors.
Lilly moved over to the role of executive vice president, global transformation.
In a March filing with the Securities and Exchange Commission, Jeld-Wen also reported that it had appointed Michael A. Leon as the company’s senior vice president and chief accounting officer.
Macquarie Capital is serving as financial adviser to JELD-WEN, and Herbert Smith Freehills is serving as legal counsel. Gresham Advisory Partners is serving as financial adviser to Platinum Equity, and Allens is serving as legal counsel.
