Apogee Enterprises Acquires UW Interco for $240 Million

By Bobby Samwell • Wednesday, September 25 15:20 • Permanent Link

Apogee Enterprises, Inc. has announced its acquisition of UW Interco, LLC ("UW Solutions") from Heartwood Partners for $240 million in cash. The acquisition is expected to close during the company’s fiscal 2025 third quarter.

UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates and serves a broad range of customers in various end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. The company has a history of innovation with a portfolio of well-known brands, including ResinDek®, ChromaLuxe®, RDC Coatings™, and Unisub®.

Apogee plans to integrate UW Solutions into its large-scale optical segment, creating a scalable growth platform in the specialty coatings and materials market. The integration plan is expected to provide $5 million of operational cost synergies by the end of fiscal 2027.

The purchase price represents a multiple of approximately 8.5x UW Solutions’ estimated adjusted EBITDA for fiscal 2026, inclusive of run-rate cost synergies of $5 million and net of an approximately $27 million tax step-up benefit provided by the transaction. The transaction is expected to be accretive to Apogee’s long-term financial profile, including revenue growth rate and adjusted EBITDA margin, and will be accretive to adjusted diluted EPS beginning in fiscal 2026. The acquisition is expected to contribute approximately $100 million of revenue with an adjusted EBITDA margin of approximately 20% in fiscal 2026.

Apogee plans to finance the transaction using cash on hand and its existing credit facility. The company expects a post-close consolidated leverage ratio (as defined in its credit facility) of approximately 1.5x.

The company will provide further details on the strategic and financial aspects of the transaction during its second quarter, fiscal 2025 earnings conference call, which is scheduled for October 4, 2024.

Apogee Enterprises, Inc. is a leading provider of architectural products and services for enclosing buildings, high-performance glass, and acrylic products used for preservation, energy conservation, and enhanced viewing. Today the company's shares have moved 2.3% to a price of $68.22. For the full picture, make sure to review Apogee Enterprises's 8-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.