MY BIGGEST DEAL Genstar finds a fit among the ashes of housing’s collapse
Dec 01, 2007 | 01:09 PM
The slumping residential construction market is helping spur consolidation among downstream metal operations. For private equity firm Genstar Capital LLC, that spells one thing opportunity.
In April, the San Francisco-based company paid $228 million for International Aluminum Corp., a producer of residential and commercial building materials. The timing of the acquisition, which came in the midst of a 20-percent downturn in the residential building market in the first half of the year, was no accident, according to Genstar managing director Darren J. Gold.
"It was a good time in the cycle to buy," he said. "We believe in buying toward or at the bottom of a cycle and taking a long view with our portfolio companies. We're patient capital. We have the luxury of taking our time and working with our companies." Given that Genstar has held on to some of its acquisitions for as long as 12 years—although it sold others as soon as two years after buying them—it might well be in for the long haul.
Genstar saw International Aluminum as an undermanaged business in a sector with growth potential, Gold said. "We have a strong belief in the residential market, and companies going through tough times have tremendous potential. Our view of the residential sector is that we have hit bottom or near bottom, but the real question is, how long until it turns back up?" ....
To access AMM's full content, please log in below. If you do not have an AMM account, we invite you to take a free trial or subscribe below.
Already a registered amm.com user?
Access to amm.com editorial content is granted only to paid subscribers and trialists. If you do not have an active account in your own name, please either subscribe or take a trial and you will have instant access to amm.com content. Sharing your login credentials with individuals who are not subscribers represents a violation of AMM copyright.
Every morning, every minute no matter how often you follow the markets, there's an AMM subscription to fit your needs.
Not sure if you are ready to invest in a subscription right now? Take a free, no-obligation trial. Start your free trial today.