Despite inflation eating into consumers’ wallets, people continue to spend money on their homes. Masonite International Corp. (NYSE: DOOR), a maker and seller of doors, recently acquired Endura Products, a manufacturer of door frames and other door parts, for $375 million. Masonite CFO Russ Tiejema spoke to us about the acquisition and the company’s M&A strategy. Read below for more.
“We’ve laid out in the last couple of years a new strategy for the business,” Tiejema tells Mergers & Acquisitions. “We’ve been very much like a traditional building products company. Our business has historically been the door slab itself. We set out a strategy where we’re looking to address a broader part of the market and that market would be selling more door systems as opposed to just door slabs.”
Tiejema says that Colfax, N.C.-based Endura fits that strategy because it helps Masonite design the door frame and the door system. The rationale behind the Endura deal has the ability to design across the entire door system as opposed to just individual pieces, Tiejema adds.
“There’s all sorts of interesting innovation that’s going on around the door that is not engineered into the door,” Tiejema says, adding that is where Masonite will likely for acquisitions. That includes security, access control and light transmission. “There’s all sorts of interesting companies out there that are doing things that help a door operate.”
Although the current economic climate is pushing several buyers to the sidelines, Masonite is sticking with its M&A plan. “You can make a case that there are times when you don’t want to do M&A because it’s not a good economic time, but if the asset is strategically enough aligned with what you’re trying to accomplish and it’s only going to be available at that particular time, that’s when you execute the transaction,’ Tiejema says. “I would argue that Endura is a little bit in that case. If it’s the right asset at the right price for the strategic aspect of the business, you move ahead. And that’s what we’ve done.”