NorthEdge exits DW3 in £70m deal

Deal done

Private equity specialist NorthEdge Capital has completed the £70m sale of DW3 Products Holding Ltd, a provider of high-quality premium door solutions and window systems to US company Masonite International Corporation.

Masonite is global designer and manufacturer of interior and exterior doors for the residential new construction, the residential repair, renovation and remodelling and the non-residential building construction markets.

The transaction is NorthEdge’s eighth exit and represents a 3.5x return and an IRR of 59% with a holding period of 40 months for NorthEdge Capital Fund I.

Led by chief executive Gareth Mobley, DW3 is a leading UK provider of high quality premium door solutions and window systems, supplying products under brand names such as Solidor, Residor, Nicedor, and Residence.

Solidor utilises a leading online offering, including a door designer and a specialised online portal, which allows trade customers to specify and purchase products online.

DW3 employs approximately 300 people located in Stoke-on-Trent and Gloucester. DW3’s net sales for the 12 months ended December 2017 were approximately £45m.

Headquartered in Tampa, Florida, Masonite serves more than 7,000 customers in 65 countries and posted net sales of $1.52 billion in the first nine months of 2017.

DW3 will expand Masonite’s UK operations and extends the business’ portfolio of product offerings and manufacturing solutions.

Jon Pickering, partner and head of North West at NorthEdge Capital, said: “DW3 has been a pioneer in developing composite doors and window products in recent years as well as leading the industry with its online presence and cloud based ordering platforms.

“This deal is testament to the talent within the group, and the success the company has been able to generate through a targeted, dynamic buy and build approach which has seen the group make acquisitions and invest heavily in capex, operational platforms, IT infrastructure, and technology.

“This exit represents a strong return on investment for NorthEdge and we are pleased that our support has culminated in investment from a global player in this market.”

Mobley said: “It has been a pleasure to work with the team at NorthEdge. The team has consistently invested in people, operations, technology, and innovation and we have been able to offer our customers access to the best products and the best service as a result.

“We are very much looking forward to the next chapter as we join one of the world’s leading building products businesses. Masonite is a global leader and this is a proud moment for our team.”

Partners Ray Stenton and Jon Pickering led the exit for NorthEdge, supported by investment executive Greg Holmes.

The Clearwater International team, who advised the shareholders, comprised of partner and head of industrials Jon Hustler, partners Rob Britton and Constantine Biller and associate Alex Brindley.

Legal advice was provided to NorthEdge and management by Eversheds Sutherland led by Andy Phillips with support from Helen Tsang and Sam Jones.

EY provided due diligence support to DW3, led by Richard Harding and Stuart Thwaites, with support from Mohammad Khalid, Adele Hickling and Linda Marston-Weston

Tony Hair, Masonite’s resident, global residential said: “DW3 fits exceptionally well with Masonite’s existing business in the UK. Their online quick ship capabilities and product portfolio both complement and expand the strategies we are pursuing in this important market.”

Jon Hustler, partner, Clearwater International said: “Masonite is a great fit for DW3 and will allow it to venture into wider markets, whilst DW3’s tech-enabled manufacturing will enhance Masonite’s potential for further innovation of its products. The product ranges of both businesses are complementary, as are the business values and ambitious nature of the management teams.”

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