Apogee Enterprises announced that it has entered into a definitive agreement to acquire UW Interco from Heartwood Partners for $240 million in cash, subject to customary closing conditions. The deal is expected to close during the company’s fiscal 2025 third quarter.
UW Solutions is a US-based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. And the company serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, and premium products for the graphic arts market. The business has a history of innovation with a portfolio of well-known brands, including ResinDEK, ChromaLuxe, RDC Coatings, and Unisub – each that known as a leader in its specified applications.
With similar core process technologies and coating expertise, Apogee plans to integrate UW Solutions into its Large-Scale Optical segment to create a scalable growth platform in the specialty coatings and materials market. And the integration plan is expected to provide $5 million of operational cost synergies by the end of fiscal 2027.
This purchase price represents a multiple of approximately 8.5x UW Solutions’ estimated adjusted EBITDA for fiscal 2026, including run-rate cost synergies of $5 million and net of about $27 million tax step-up benefit provided by the transaction. The deal 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. And this 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.
Cleary Gottlieb Steen & Hamilton served as legal counsel to Apogee and Centerview Partners served as financial advisor.
KEY QUOTES:
“UW Solutions is a highly strategic acquisition, aligned with our strategy of adding differentiated businesses with a track record of operating excellence to our portfolio. This acquisition will strengthen LSO, our most profitable business segment, and expands our offering of high-performance coated substrate solutions.”
“We are excited to welcome UW Solutions’ employees to Apogee and look forward to working with them to build a powerful new growth engine for our Company. We are expanding our product offerings for non-residential construction by providing an entry into manufacturing, warehousing, and distribution center projects, while accelerating our efforts to diversify the LSO segment. We expect meaningful opportunities to utilize the performance coatings capabilities of the combined business to drive long-term growth.”
-Ty R. Silberhorn, Apogee’s Chief Executive Officer
