Tampa-based NewSouth Window Solutions grew to nearly $80 million in annual sales in less than a decade.
VENICE — Impact-resistant window and door manufacturer PGT Innovations, one of the largest employers in the region, is getting into a new line of business with its latest acquisition: the direct-to-consumer model.
In a deal announced Dec. 10, PGT signed a definitive agreement to acquire Tampa-based NewSouth Window Solutions. PGT will pay $92 million in cash, subject to adjustments, for NewSouth, according to a statement.
NewSouth is a manufacturer and installer of factory-direct, energy-efficient windows and doors, including both impact-resistant and non-impact residential products. NewSouth has eight retail showrooms in several locations throughout Florida, with an additional showroom in Charleston, S.C. and is the only vertically integrated window dealer in Florida, the release adds.
“This transaction is expected to support our diversification into growing segments in the window and door industry, by enabling us to enter the direct-to-consumer channel, where NewSouth is a market leader in Florida,” PGT Innovations President and CEO Jeff Jackson says in the release. “NewSouth’s direct-to-consumer model is supported by its showrooms and in-home sales. With the addition of NewSouth, we expect to continue our strategy to grow in geographic areas outside of our core markets, with showroom openings planned for northern Florida and coastal states in the South.”
NewSouth, founded by window industry veterans Daniel Ochstein and Earl Rahn in 2010, has been on a tear the last three years. It’s grown revenues 82.2% since 2016, from $41.6 million to $75.8 million in 2018. The firm projected net sales of $82 million to $85 million in 2019, according to the statement.
“We are excited to be joining the NewSouth team with PGTI Innovations and are thrilled to become part of the PGT Innovations family. After successfully executing our growth plan in Florida, we expect this combination to provide growth opportunities to better serve the southern coastal markets and beyond,” says Rahn, NewSouth CEO, in the statement.
In addition to adding direct-to-consumer marketing, PGTI officials, in the statement, say the acquisition offers several other strategic and financial benefits, including:
• Drive brand awareness with NewSouth’s successful advertising and marketing programs, including television, digital media and direct mail;
• Utilize NewSouth’s market intelligence through more effective marketing and promotional campaigns that should benefit PGTI’s legacy brands and dealer network;
• Drive efficiencies across the entire supply chain, including in the areas of procurement savings and production efficiencies;
• Expected savings of $2 million anticipated by leveraging PGTI’s size and scale on raw material purchases and applying efficient practices to NewSouth’s production operations.
NewSouth’s leadership will remain with the business after the acquisition.
PGTI , with $698.5 million in revenue in 2018, expects to finance the transaction through a combination of cash on hand and with an additional $50 million of long-term debt, the release states. The transaction is expected to close in the first quarter of 2020, subject to customary closing conditions.