Nucor Corporation is purchasing the Illinois-based C.H.I. Overhead Doors (C.H.I.) from a private equity firm for $3 billion, Yahoo Finance reports – and it’s a deal for the ages.
C.H.I., a leading manufacturer of overhead doors such as garage doors, had been owned by private equity firm Kohlberg Kravis Roberts & Co (KKR). The $3 billion deal is one of KKR’s largest in recent times, as it’s 10 times larger than the original equity invested. Additionally, the transaction is 13 times more than C.H.I.’s estimated trailing year-long earnings before interest, taxes, depreciation, and amortization (EBITDA). The deal is expected to close in June, pending regulatory approvals, and it will be immediately accretive in Nucor’s first year of ownership.
C.H.I. is a small company with only 800 employees, but they have manufacturing warehouses in California, New Hampshire, Colorado, and New Jersey. Their overhead doors are used in everything from warehousing to retail to residential buildings – a good fit for Nucor’s portfolio, which includes steel racking company Elite Storage Solutions and insulated metal panel makers CENTRIA and TruCore Brands. Nucor purchased Elite Storage Solutions for $75 million in April 2022 and invested $350 million in a new micro steel mill, which will create at least 180 jobs.
“As with the acquisitions Nucor made in the past year, C.H.I. increases the overall long-run value of the organization with businesses that have strong free cash flow characteristics, robust growth prospects, and fit with Nucor's capabilities," said President and Chief Executive Office Leon Topalian in a press release.
Topalian calls C.H.I. a highly profitable organization with an amazing culture and says that they fit into Nucor’s long-term strategy of eco-friendly, profitable manufacturing models. Along with being North America’s largest recycler, Nucor’s steel bar products are made of 97% recycled material, making the company one of the most sustainable steel producers in the world.