In January 2019, Mergermarket’s Sam Weisberg and Peter Agra reported that Dura Supreme was in advanced stages of a sale effort. They identified Keith Stotts, son of original founder Donald Stotts, as president and owner and established the EBITDA of the company at USD 25m and potential multiples in the single digits.
On October 2019, it was announced that GHK Partners had acquired GHK
Dura Supreme Cabinetry, a manufacturer of household cabinets, is close to collecting final bids in a sale process alongside Harris Williams, according to two sources familiar with the situation.
The Howard Lake, Minnesota-based business, founded by Donald Stotts in 1954 and now run by his son, Keith Stotts, president, generates around USD 25m in EBITDA, both sources said. One of them added that management meetings with suitors occurred before the holidays, and that final bids are expected to come in late this month.
A combination of strategic and private equity groups are looking at Dura, said both sources. Dura is one of the highest-margin cabinet companies, with margins of 30%, one source noted.
As the building products space is generally cyclical, the sale multiple is anticipated to be in the single digits, said one of the sources.
In November, kitchen and bath cabinetry distributor Wolf Home Products halted a sale process after the company didn’t get the valuation it had been seeking, according to a previous report by this news service. Fidus Partners had been shopping the firm off of EBITDA in the mid-to-high USD 20m range, aiming for a 9.5x to 10.5x valuation.
Transactions in the building products space have been struggling lately, with suitors hesitant to pay lofty valuations as the industry outlook has cooled, two industry sources noted.
In November, Moody’s Investors Service revised the US building materials industry outlook to stable from positive due to expectations that organic operating income growth for rated building materials companies will decelerate in 2019. The ratings agency also forecast that single-family housing starts will rise by 4.5% in 2018 and 3.2% in 2019, down from an average 9% to 10% growth rate achieved between 2015 and 2017.
Dura’s products include kitchen cabinets, fireplace mantels, entertainment centers, bathroom fixtures, and storage spaces for spices, cutlery, desk supplies and other items.
Dura and Harris Williams did not respond to requests for comment.