PVC maker Georgia Gulf is to buy leading window profile manufacturer Royal Group of Toronto for a total of $1.7bn (E1.3bn).
The companies reached agreement on the deal late last week, citing benefits from the vertical integration of the Atlanta-based resin maker with the downstream PVC user.
The price for the take-over represents a premium of 43% over the price at which Royal group’s shares were trading prior to the Georgia Gulf move. With annual sales of around $1.5bn (E1.2bn), Royal Group tops the rankings of PVC window profile makers.
The company has been up for sale for more than one year and local analysts had wondered whether a buyer would emerge for the Canadian firm, subject of regulatory probes into its practices.
“We believe that the combination of Georgia Gulf and Royal Group will result in a formidable force in the vinyl products industry,” said Royal president and chief executive Lawrence Blanford.
Georgia Gulf has a good track record of successfully integrating businesses, according to Ed Schmitt, chairman, president and chief executive.
