ASSOCIATED MATERIALS AND HARVEST PARTNERS ANNOUNCE INVESTCORP TO
INVEST $150 MILLION
IN RECAPITALIZATION OF COMPANY
-- Current Investors to Retain 50% Interest --
CUYAHOGA FALLS, OHIO, December 6, 2004 -AMH Holdings, Inc. ("AMH"), a portfolio
company of Harvest Partners, Inc. ("Harvest Partners"), a New York-based private
equity investment firm, announced that it has entered into a definitive
agreement with Investcorp, a global investment group, regarding a
recapitalization of AMH. AMH is the indirect parent of Associated Materials
Incorporated ("AMI"). Upon completion of the transaction, Investcorp and its
co-investors will hold an indirect equity ownership interest in AMI of 50
percent, with current shareholders, led by Harvest Partners and including
co-investor Weston Presidio, retaining 50 percent, on a fully diluted basis.
Each of Investcorp and Harvest Partners will have a 50% voting interest in AMI's
newly-formed indirect parent company.
AMI is a leading, vertically integrated manufacturer and North American
distributor of exterior residential building products. AMI's core products
include vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel
siding and accessories, as well as vinyl fencing, decking and railing. AMI
reported net sales of $820.3 million for the first nine months of 2004.
Under the terms of the recapitalization, Investcorp and its co-investors will
purchase from the existing shareholders $150 million of convertible preferred
stock of the newly-formed holding company that will own AMH and AMI. At the same
time, AMI will increase its senior credit facility by $42 million and the
newly-formed holding company will issue $75 million of senior notes to pay
approximately $118 million in the form of a dividend to existing shareholders
and certain payments to management stockholders. In conjunction with the
transaction, AMI's President and Chief Executive Officer, Michael Caporale, will
also assume the title of Chairman of the Board of Directors. This transaction is
expected to be consummated by the end of December 2004, subject to the
satisfaction and waiver of customary closing conditions, including obtaining
this financing.
Michael Caporale commented: "Investcorp is a highly respected private equity
investment firm with significant experience in the building product industry and
related sectors. We welcome their strategic support, as well as their
significant equity investment, as we continue to pursue a range of growth
opportunities. We are proud of the tremendous progress we have made from an
operational and financial standpoint over the last four years since the current
leadership team joined AMI and fortunate to have strong partners in both Harvest
Partners and Investcorp."
Christopher J. Stadler, head of Investcorp North American corporate investment,
said: "We believe Associated Materials' multi-brand strategy, which spans
multiple distribution channels in the United States and Canada, positions it as
a market leader in the building products industry. Over the past few years,
AMI's senior management team, led by Michael Caporale, has increased core
product market share by simplifying and focusing the business, acquiring and
integrating new businesses, as well as by financing its
growth cost effectively. We see significant opportunity for additional growth of
this well-run, high-service building products company, particularly in the large
and fragmented window market, by capitalizing on its strong distribution
network. Investcorp is pleased to join Harvest Partners in supporting the growth
objectives of this exceptional company."
Ira Kleinman, Senior Managing Director of Harvest Partners, commented: "We are
delighted to announce the recapitalization of AMI in what we believe is a great
transaction for the company's shareholders and a testament to management's
tremendous accomplishments over the past two and a half years. Following
Harvest's acquisition of the company in early 2002, AMI has consolidated its
headquarters, disposed of a non-core subsidiary, acquired and seamlessly
integrated a competitor, completed a successful recapitalization and
consistently outperformed the industry. This exceptional track record has
allowed us to achieve liquidity in this transaction, which will also preserve a
significant portion of our equity stake. We are thrilled to participate in the
future of this company and will support CEO Mike Caporale and his team in
availing the numerous additional opportunities that they have identified. In
Investcorp we have found the ideal value-added partner for AMI and look forward
to working with them in achieving these goals."
Citigroup Global Markets Inc. served as financial advisor to AMI. UBS Securities
LLC and Citigroup Global Markets Inc will act as joint lead arrangers to the
amended and restated senior credit facility. Apollo Investment Corporation will
be the lead investor in the senior notes.
About Investcorp
Investcorp is a global investment group with offices in New York, London and
Bahrain. The firm has four lines of business: corporate investment, real estate
investment, asset management and technology investment. It was established in
1982 and has since completed transactions with a total acquisition value of more
than $25 billion. The firm now manages total investments in alternative assets
of approximately $8.6 billion. In the United States, Investcorp and its clients
currently own corporate investments that include Aero Products International,
PlayPower, EnviroSolutions, and Thomson Media. In Europe, Investcorp and its
clients currently own corporate investments that include APCOA AG, Hilding
Anders, Minimax and Helly Hansen. Further information is available at
www.investcorp.com.
About Harvest Partners
Founded in 1981, Harvest Partners is a leading New York-based private equity
investment firm, pursuing management buyouts and growth financings of
profitable, medium-sized businesses. Focused on specialty services, consumer,
manufacturing and value-added distribution businesses, Harvest has over 20 years
of experience investing in domestic as well as multinational companies.
Currently, Harvest Partners has over $1 billion of invested and committed
capital under management from its limited partners, which include numerous
pension funds, domestic and international industrial corporations, and various
financial institutions. Select Harvest Partners portfolio companies include
Evenflo Company, Inc., a leading manufacturer and marketer of a full line of
juvenile products; Communications Supply Corporation, a leading U.S. distributor
of low voltage network infrastructure products; New Flyer Holdings, Inc., the
largest North American manufacturer of transit buses; Natural Products Group,
LLC, a manufacturer and distributor of personal care products; and Global Power
Equipment Group, Inc. (NYSE: GEG), a leading designer, engineer and fabricator
of gas turbine power plant-related products. For more information on Harvest
Partners, please visit the web site at www.harvpart.com.
About Associated Materials
Associated Materials Incorporated is a leading manufacturer of exterior
residential building products, which are distributed through company-owned
distribution centers and independent distributors across North America. AMI
produces a broad range of vinyl windows, vinyl siding, aluminum trim coil,
aluminum and steel siding and accessories, as well as vinyl fencing, decking and
railing. AMI is a privately held, wholly-owned subsidiary of Associated
Materials Holdings Inc., a wholly-owned subsidiary of AMH, which is controlled
by affiliates of Harvest Partners. For more information, please visit the
Company's website at www.associatedmaterials.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 AMI
and AMH that are based on the beliefs of AMI's and AMH's management. When used
in this press release, the words "may," "will," "should," "expect," "intend,"
"estimate," "anticipate," "believe," "predict," "potential" or "continue" or
similar expressions identify forward-looking statements. Such statements reflect
the current views of AMI's and AMH's management with respect to the consummation
of this transaction, the Company's future growth and opportunities, operations
and results of operations regarding the home building industry, economy,
interest rates, foreign currency exchange rates, availability of consumer
credit, employment trends, levels of consumer confidence, consumer preferences,
raw material costs and availability, national and regional trends in new housing
starts, weather conditions, the Company's ability to comply with certain
financial covenants in loan documents governing its indebtedness, level of
competition within its market, availability of alternative building products,
its level of indebtedness, costs of environmental compliance, increase in
capital expenditure requirements potential conflict between Alside and Gentek
distribution channels, achievement of anticipated synergies and operational
efficiencies from the acquisition of Gentek, 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 expected, intended,
estimated, anticipated, believed or predicted.
Contacts: For Investcorp
--------------
Todd Fogarty
Kekst and Company
212-521-4854
For Associated Materials
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D. Keith LaVanway
330-922-2004
For Harvest Partners
--------------------
Ira D. Kleinman
Christopher D. Whalen
212-599-6300