CSW Industrials, Inc. (Nasdaq: CSWI) today announced it acquired
Shoemaker Manufacturing for $41.3 million. This strategic
acquisition further expands CSWI’s HVAC/R product offering, with
customizable GRD for commercial and residential markets, and
regional exposure to the northwest United States, where CSWI
historically maintained a modest presence. The Shoemaker
acquisition aligns with CSWI’s stated objective of leveraging its
existing distribution channels, go-to-market strategy, and deep
experience in the HVAC/R market, while providing additional,
compelling product offerings to existing customers.
The $41.3 million purchase price was
approximately 8.5 times Shoemaker’s expected calendar year 2021
adjusted earnings before interest, taxes, depreciation, and
amortization. CSWI funded the transaction with a combination of
cash on hand, borrowings under its existing $400.0 million
revolving credit facility, and approximately 25,500 shares of
common stock issued to the sellers. The terms of the acquisition
provide for additional contingent consideration of up to $2.0
million based on Shoemaker achieving certain financial performance
milestones in the first quarter of calendar 2022, which, if
achieved, would reduce the indicated valuation multiple.
Shoemaker Manufacturing, based in Cle Elum,
Washington and established in 1947, manufactures high-quality GRD,
with approximately 55% and 45% of calendar 2021 sales serving
residential and commercial applications, respectively. Shoemaker’s
success is driven by its broad product offerings, customizable
design, and ease of online specifications and ordering, which
results in providing consistent, reliable, and readily available
products to distributors. With 180,000 square feet of domestic
manufacturing, the Shoemaker acquisition provides CSWI additional
capacity to manage its global supply base. Shoemaker also maintains
a small logistics operation for localized delivery of finished
goods and backhaul of raw materials, primarily serving the Pacific
Northwest and into California, providing beneficial debottlenecking
in the current supply chain environment.
Joseph B. Armes, CSW Industrials’ Chairman,
President, and Chief Executive Officer, commented, “We are pleased
to announce another acquisition in our highly profitable Contractor
Solutions segment, and specifically a bolt-on in the HVAC/R end
market. Shoemaker’s strong reputation is built upon the quality of
its manufactured products, innovation in its customized online
ordering process, and relentless focus on customer service.
Shoemaker and TRUaire’s GRD products are complementary, and result
in an expanded portfolio of offerings that we expect to drive
increased share of wallet with customers and broaden our exposure
to the northwest region.”
Armes continued, “We welcome all of our new
colleagues to CSW Industrials, and look forward to combining the
expertise of John Hein, Claire Nicholls, and the full Shoemaker
leadership team with our team. We appreciate this rare opportunity
to build upon Shoemaker’s 75-year history and the success sustained
through three generations of ownership. CSWI is committed to
treating our employees well, serving our customers well, and we are
confident that this acquisition will enhance our HVAC/R strategy
and support CSWI’s commitment to delivering sustainable long-term
growth and profitability.”
Safe Harbor StatementThis press
release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, which are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, as amended. Words or phrases such as "may," "should,"
"expects," "could," "intends," "plans," "anticipates," "estimates,"
"believes," "forecasts," "predicts" or other similar expressions
are intended to identify forward-looking statements, which include,
without limitation, earnings forecasts, effective tax rate,
statements relating to our business strategy and statements of
expectations, beliefs, future plans and strategies and anticipated
developments concerning our industry, business, operations, and
financial performance and condition.
The forward-looking statements included in this
press release are based on our current expectations, projections,
estimates, and assumptions. These statements are only predictions,
not guarantees. Such forward-looking statements are subject to
numerous risks and uncertainties that are difficult to predict.
These risks and uncertainties may cause actual results to differ
materially from what is forecast in such forward-looking
statements, and include, without limitation, the risk factors
described from time to time in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K.
This press release contains estimated results of
Shoemaker for the calendar year 2021 (the “estimated results”). The
estimated results are forward-looking statements based on
Shoemaker’s management’s estimates as of the date hereof, and
Shoemaker’s actual results may be materially different from the
estimated results. The estimated results are preliminary, unaudited
and reflect Shoemaker’s management’s current views with respect to
future results and may change as a result of industry or other
developments through year-end 2021.
All forward-looking statements included in this
press release are based on information currently available to us,
and we assume no obligation to update any forward-looking statement
except as may be required by law.
About CSW IndustrialsCSW
Industrials is a growth-oriented, diversified industrial Company
with industry-leading operations in three segments: Contractor
Solutions, Engineered Building Solutions, and Specialized
Reliability Solutions. CSWI provides niche, value-added products
with two essential commonalities: performance and reliability. The
primary end markets we serve with our well-known brands include:
HVAC/R, plumbing, general industrial, architecturally-specified
building products, energy, mining, and rail. For more information,
please visit www.cswindustrials.com. For more information, please
visit www.cswindustrials.com.
Investor RelationsAdrianne D. GriffinVice
President, Investor Relations, &
Treasurer214-489-7113adrianne.griffin@cswi.com
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