HEADWATERS INCORPORATED (NYSE: HW),
a building products company dedicated to improving lives through innovative advancements in construction materials, today announced it has entered into an agreement to acquire the assets of Kleer Lumber, Inc., a manufacturer of high quality and eco-friendly cellular PVC trim board and moulding products. The acquisition of Kleer Lumber will add a full range of cellular PVC products to Headwaters' Light Building Products offerings, including trim boards, millwork, sheet stock, paneling, and moulding, as well as the company's recently introduced decking and railing products. Kleer Lumber's trim boards offer the TruEDGE feature, a proprietary and innovative technology that seals edges, improving trim board performance and appearance. Kleer Lumber's products are manufactured at its Westfield, Massachusetts manufacturing and research and development facility.
Headwaters believes the demand for cellular PVC building products is growing due to the ability to cut, mill, shape, and install in the same manner as wood products, but with the added benefit of cellular PVC requiring significantly less maintenance than wood.
Headwaters intends to introduce Kleer Lumber's product offerings into its large, national distribution network, expanding its point of sale locations. In addition, Kleer Lumber primarily distributes its products into independent lumber yards and home improvement centers located in the Northeast and Mid-Atlantic states. Headwaters’ increased access to this distribution channel for its existing products will expand Headwaters’ already extensive light building products distribution network.
Since commencement of operations in 2005, Kleer Lumber has exhibited increasing sales and profit growth despite the recent declines in the broader repair and remodel and new residential construction markets. From 2009 to date, Kleer Lumber's sales increased at a compound annual growth rate of more than 18%, with sales of approximately $38 million for the twelve months ended October 31, 2012. This increase in sales growth reflects a combination of the introduction of new products and an increase in sales of existing products. The Kleer Lumber acquisition is expected to be immediately accretive to Headwaters’ earnings per share.