Exhibit 99.1
FOR IMMEDIATE RELEASE
NEWS RELEASE
ASSOCIATED MATERIALS TO ACQUIRE GENTEK HOLDINGS INC.
CUYAHOGA FALLS, Ohio, July 31, 2003 -- Associated Materials Incorporated
("Associated Materials") today announced that it has signed a definitive
agreement to acquire all of the issued and outstanding shares of capital stock
of Gentek Holdings Inc. ("Gentek Holdings") and to repay all indebtedness of
Gentek Holdings and its subsidiaries for an aggregate purchase price of
approximately $118 million in cash, which includes an estimated working capital
adjustment. The purchase price is subject to certain adjustments as well as
customary transaction fees.
Gentek Holdings, which is privately held, is the parent company of Gentek
Building Products, Inc. and Gentek Building Products Limited (collectively,
"Gentek"). Gentek manufactures and distributes vinyl, aluminum and steel siding
and accessories and vinyl windows under the Revere(R) and Gentek(R) brand names.
Gentek markets its products to professional contractors on a wholesale basis
through company-owned distribution centers and independent distributors in the
United States and Canada. For the year ended December 31, 2002, Gentek reported
net sales of $260.1 million, net income of $9.2 million and EBITDA of $19.3
million. A reconciliation of EBITDA to net income is included in the table
below.
Michael Caporale, President and Chief Executive Officer of Associated Materials
commented, "I am very excited about our acquisition of Gentek. Gentek's thirteen
company-owned distribution centers in the mid-Atlantic region of the United
States and twenty company-owned distribution centers in Canada will expand
Associated Materials' market presence throughout North America. Gentek's strong
U.S. independent distributor business will also allow us to increase our
presence in this important market channel. Their outstanding metal manufacturing
capability will allow us to vertically integrate the metals products that are
sold by our Alside supply centers. Finally, Gentek's world class vinyl
manufacturing plant in Burlington, Ontario will provide Associated Materials
with additional vinyl siding capacity."
Mr. Caporale continued, "We strongly believe in the brand equity of the
Revere(R) and Gentek(R) names. We intend to maintain distinct separation of
these brands from our Alside brand by continuing to offer differentiated
product, sales and marketing support. Revere(R) and Gentek(R) customers will
continue to receive the same excellent service and support that they have
enjoyed in the past."
The proposed acquisition is expected to close by the end of August 2003 and is
subject to customary conditions including receipt of regulatory approvals and
Associated Materials' receipt of financing.
In connection with the acquisition, Associated Materials expects to amend its
existing $165 million credit facility by adding a term loan facility to borrow
up to an approximate additional $113.5 million and expanding its revolving loan
facility from $40 million to $70 million, including a new Canadian subfacility
of $15 million (USD). UBS, Credit Suisse First Boston, and CIBC World Markets
have agreed, on an uncommitted basis to arrange the new credit facility on
substantially the same terms and conditions as Associated Materials' existing
credit
facility. Associated Materials' 9 3/4% Senior Subordinated Notes Due 2012 will
continue to remain outstanding.
White & Case LLP served as legal advisor to Associated Materials.
* * *
Associated Materials will discuss today's announcement during its second quarter
earnings conference call, which will be held on Friday, August 1, 2003 at 11
a.m. Eastern Time. The toll free dial-in number for the call is (866) 686-6743.
A replay of the call will be available through August 8, 2003 by dialing (888)
843-8996 and entering the conference call identification number of 7303973. This
release can be accessed via Associated Materials' web site at
http://www.associatedmaterials.com.
* * *
Associated Materials is a leading manufacturer of exterior residential building
products, which are distributed through 91 company-owned Supply Centers across
the United States. Associated Materials produces a broad range of vinyl siding
and vinyl window product lines as well as vinyl fencing, decking and railing and
vinyl garage doors. Associated Materials is a privately held, wholly owned
subsidiary of Associated Materials Holdings Inc., which is controlled by
affiliates of Harvest Partners, Inc. For more information, please visit the
company's website at http://www.associatedmaterials.com.
Founded in 1981, Harvest Partners has approximately $1 billion of invested and
committed capital, and is focused on management buyouts and growth financings of
profitable, medium-sized specialty services, manufacturing and value-added
distribution businesses, with a particular emphasis on multinational
transactions. Harvest has significant additional capital available through its
limited partners, which include numerous U.S., European and Asian industrial
corporations and financial institutions. For more information on Harvest
Partners please visit its web site at http://www.harvpart.com.
This press release contains certain forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) relating to
Associated Materials that are based on the beliefs of Associated Materials'
management. When used in this press release, the words "anticipate," "believe,"
"estimate," "expect," "intend," and similar expressions identify forward-looking
statements. Such statements reflect the current views of Associated Materials'
management with respect to Associated Materials' ability to consummate and
profit from the acquisition of Gentek Holdings, including Associated Materials'
ability to amend its existing credit facility, and to grow the Gentek brands as
expected. Associated Materials' ability to profit from its initiatives will
depend on a number of factors, including primarily customer acceptance of
Gentek's products and the achievement of anticipated synergies. Such statements
also reflect the current views of Associated Materials' management with respect
to its operations and results of operations regarding the availability of
consumer credit, interest rates, employment trends, levels of consumer
confidence, consumer preferences, national and regional trends in new housing
starts, raw material costs, pricing pressures, costs of environmental
compliance, level of competition within our market, availability of alternative
building products,
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shifts in market demand, and general economic conditions. These statements are
subject to certain risks and uncertainties. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions or estimates prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected or intended.
For Further Information
At Associated Materials: At Abernathy MacGregor Group Inc.:
D. Keith LaVanway Alison Brandt
Chief Financial Officer Media
(330) 922-2004 (212) 371-5999
Gentek Holdings, Inc.
Reconciliation of Net Income to EBITDA (a)
(in millions)
Year
Ended
December 31,
2002
Net income ......................................... $ 9.2
Interest............................................ 1.9
Taxes............................................... 2.7
Depreciation and Amortization....................... 5.5
--------
EBITDA $ 19.3
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(a) EBITDA is calculated as net income plus interest, taxes, depreciation and
amortization. Associated Materials considers EBITDA to be an important
indicator of Gentek's operational strength and performance of its business.
Associated Materials has included Gentek's EBITDA because it believes
EBITDA is used by certain investors as one measure of a company's ability
to service its debt. EBITDA should be considered in addition to, not as a
substitute for, Associated Materials' or Gentek's net income or loss or to
cash flows as well as other measures of financial performance in accordance
with accounting principles generally accepted in the United States. EBITDA
has not been prepared in accordance with accounting principles generally
accepted in the United States. Therefore, EBITDA as presented by Associated
Materials or Gentek may not be comparable to similarly titled measures
reported by other companies.