Chicago firm moves to acquire cabinetmaker with local ties

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This article was published 31/03/2015 (4160 days ago), so information in it may no longer be current.

THE Buller family has done very well for itself building companies and then selling them to Fortune Brands.

On Monday, Fortune Brands Home & Security Inc. based in suburban Chicago, announced an agreement to acquire Norcraft Companies, Inc., based out of Egan, Minn.

When the deal closes it will be the second time in 16 years the Bullers have sold a business to Fortune Brands. Mark Buller, who continues to be based in Winnipeg, is the CEO of Norcraft Companies Inc.

In 1999, the Buller family sold Kitchen Craft — which was founded by Mark’s father Herb and a couple of parters in 1971 — to Iowa-based Omega Group, which was subsequently bought by Fortune Brands in 2002 for $538 million.

Fortune Brands’ MasterBrand Cabinets division is already the largest kitchen and bathroom manufacturer in North America.

On Monday, Norcraft issued its year-end results, posting a 10.7 per cent increase in sales to $376 million. It is the fifth-largest cabinetmaker in North America.

Fortune Brands kitchen and bathroom cabinet division recently reported 2014 sales of $1.8 billion. Norcraft’s board and shareholders — including the Buller family — which represents 53.6 per cent of the shares have endorsed the Fortune Brand offer of $25.50 US per share resulting in an enterprise value of approximately $600 million.

Norcraft shares closed up 12 per cent to $25.67 US on Monday after announcement of the deal early in the day.

At least two U.S. law firms announced Monday they are investigating the deal, questioning whether or not it achieves maximum value and adequately compensates its shareholders.

Mark Buller, his father and three brothers teamed up with a couple of U.S. private equity firms to acquire Norcraft in 2003.

In 2013, the company raised about US$100 million in an initial public offering and its shares have been listed since then.

In addition to its Winnipeg plant, Norcraft has production facilities in Minnesota, South Dakota, Virginia, Kansas and North Carolina.

Last fall, Buller announced its Winnipeg plant — just down the road from the Kitchen Craft, the former Buller family-owned company — would become Norcraft’s first major expansion in 10 years, more than doubling the plant to more than 130,000 square feet.

At the time, it had about 230 Winnipeg employees and expected to double its staff when the expansion is completed later this year.

Buller was unavailable for an interview on Monday, but said in a company release, “We believe our combined business will be better positioned to deepen our presence in new and existing markets while also enhancing our product offerings, customer relationships and operating platform. With our mutual focus on product innovation, dedicated service to customers and operational excellence, we believe this transaction provides an opportunity to benefit all of our stakeholders.”

Chris Klein, CEO of Fortune Brands, said, “The combination of the two best cabinet businesses in North America is exciting. We see many opportunities for enhanced growth by bringing these businesses together.”

martin.cash@freepress.mb.ca