Industry Responds to EFCO Sale
The commercial manufacturing world collided with the residential
domain on August 28 with the sale of EFCO Corp.-which produces architectural
aluminum window, curtainwall, storefront and entrance systems-to
the primarily-residential door and window manufacturer Pella Corp.
in Pella, Iowa.
With the current slump in the residential construction market,
it may seem like a smart move for a residential manufacturer to
expand into commercial construction.
"I know some people have tried it in the past," says
Bill Carter, vice president of sales of Carter Glass Co. in Kansas
City, Mo. "TRACO, I think, is one that went from more of a
residential-type aluminum market
[to commercial market]."
However, Clark Folsom, national marketing manager of United States
Aluminum in Waxahachie, Texas, says, "I don't think that's
Oliver Stepe, senior vice president of YKK AP America Inc. in Austell,
Ga., says the benefit for Pella may lie in the variety of window
fenestration systems the company will gain.
"From our perspective, there is an emerging need to increase
the energy efficiency of commercial and residential fenestration
systems while maintaining other necessary characteristics such as
strength and aesthetics. So, from this perspective, it makes sense
that a company like Pella that has interest but possibly lacks the
knowledge of the commercial market would acquire a company like
EFCO; hence giving them multiple window materials and types."
Stepe adds that YKK AP started a residential division nearly two
years ago specializing in vinyl windows, in order to consider multiple
materials in fenestration. "This addition to our portfolio
has uniquely positioned our company with 'built-in' synergy in technology,
corporate culture and systems to meet the needs of the future market."
Fulson does believe the sale could be a good move for EFCO, and
for the commercial glass industry. "I think it will be good
for the industry. I think they [Pella] have the financial backing
to help EFCO succeed."
Carter agrees that there could be benefits to the commercial glass
industry in this new development.
"If [Pella is] planning on entering the commercial glazing
market through the aluminum systems that EFCO has
it would be a good impact because we need to keep the competition
in the marketplace, and EFCO has definitely played a big role in
major projects across the country for the last [several decades],"
For EFCO customers, there are many questions yet to be answered
about the sale, including the influence the primarily-residential
manufacturer will have on its new commercial subsidiary, and how
long-time EFCO customers will be affected.
"We're not on the residential side, we know [only] the name
Pella," says Lee Still, warehouse manager with Walker &
Laberge in Norfolk, Va. The glazing contractor has largely used
EFCO products in its work.
Still says he has heard nothing yet as to how the sale will impact
"[It] came kind of as a shock to all of us," Still says.
He notes that the sale has been a topic of much discussion at the
company. "All of us were surprised because we didn't think
Pella was that large."
Carter adds that he can't help but wonder, at this early stage,
what Pella's intention might be in purchasing EFCO. He wonders if
Pella will decide to "Utilize [its subsidiary] more for expanding
insulating glass or other contributing products that
you use in window making, or if they're actually going to keep everything
in place that EFCO has established over the years?"
While Pella's goal with this purchase has not yet emerged, industry
professionals can make predictions about the challenges the company
will face in integrating its new subsidiary.
"I think that they need to keep in mind that there are distinct
differences between these two markets," Carter says. "The
codes and compliances and things that are prevalent
in the commercial market are really not there in the residential
"For Pella, although they have acquired EFCO, their challenge
will lie in the successful integration of the two companies, strategies
and corporate cultures," Stepe says. "We are looking forward
to seeing how this new company will emerge and hopefully provide
a positive influence and healthy competition within the commercial
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HERE for the announcement of EFCO's sale to Pella.
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