On November 4th Solidor announced that it had received significant investment from a company called NorthEdge Capital, forming a new business called DW3 Product Group. With this extra cash, the new group plans to go on an aggressive acquisition trail on both the business and personnel front. What we have here is the very public formation of another industry super-group, which according to the release Solidor posted on their website will change the way the UK fenestration works. That’s a big promise. But away from the excitement and speculation about who is to be bought and sold, this sort of news points to bigger changes in the industry.
Cash to spend
A little while ago, when Door-Stop were bought by American company Masonite, I mentioned that there was still room in the industry for more acquisitions. As far as I’m concerned there are still too many companies in certain sectors, and more consolidation was required to make the industry the right amount of lean it has to be. Add to this the fact that there are certain companies in this industry which has experienced some very aggressive growth over the last few years, the time is right for some with the financial clout to start expanding their operations and asserting their industry power.
The time to go on the offensive seems about right. The industry is returning to fine health. Profit margins are being restored to (hopefully) most of the industry and those with money to spend are still able to buy up companies for a good value.
High confidence
This all goes to show that confidence inside the industry is rather high. This sort of aggressive and rather public demonstration of financial fire power wouldn’t have been seen five years ago. It was all very conservative during the recession years, with more companies going to the wall than being bought. But half a decade later and a UK-wide economy growing stronger and faster than most others in the world, monetary confidence is riding high once again.
It’s also worth thinking about things from a Solidor perspective. For a business wanting to grow, one of the best ways is to diversify their product range. Now they could start venturing into new lines from scratch, but that takes a lot of time, money, research, expertise and trial and error. That all makes for a lot of work and little profit. So why not buy a business already doing well in that desired sector and amalgamate that into the existing group? A lot easier if you ask me.
The crunch of it is, the industry is in rude health. There are companies out there with very healthy bank balances ready to start plans for aggressive growth and innovation. This should mean job creation too. This is a good thing for the industry and should help reassure any doubters that the industry really has now turned a corner.
