August 28, 2007 | Vol 2, Num 35
e-glass weekly, your weekly source for industry news and financial data
News to know
More consolidation coming
More top stories
Product spotlight
Temperature controller
Construction slips 11 percent in July
More business headlines
Do you think the fall of the subprime mortgage market will affect construction spending in the nonresidential segment?
Yes, and it could be severe
Yes, but it will be minor
No, the market is strong enough to withstand it

Last week's poll results: 
Have you been a victim of an ordering scam?

56.58%: No

27.63%: No, because we caught on in time

15.79%: Yes

News to know

More consolidation coming
Customers respond to rumored Efco-Pella deal

While representatives from both companies aren’t talking, many industry players are already responding to the much-rumored deal between Efco Corp. of Monett, Mo., and Pella Corp., of Pella, Iowa.

If the deal goes through—an anonymous source says Pella will buy Efco before GlassBuild America, Sept. 10-12—it will mark the second major industry merger in the past three months, following the late June purchase of The Vistawall Group of Terrell, Texas, by Oldcastle Glass of Santa Monica, Calif.

“We’re seeing more consolidation. The little guy is going,” says Chuck Glidden, manager at American Glass Co. in Waterville, Maine.

Clive Thatcher, manager at Island Glass Co. in Bermuda, agrees the industry is shrinking as companies merge and speculates increasing overseas competition might be part of the cause.

“China is going to become a major player. … [North American companies] can’t stay as they are,” Thatcher says. As a result, competing companies serving the same geographic areas will merge to save costs, he says. “You’re going to find a lot of consolidation.”

In addition to having an industry-wide impact, consolidation also hits customers in good and bad ways. Pella's possible purchase of Efco is no different.

Thatcher says Island Glass has turned to Efco for almost all of its projects for years, and it will be an adjustment working with the new representatives. “The biggest problem we’ll have is getting used to new people, like when Oldcastle bought [Fulton Windows of Mississauga, Ontario]. The Oldcastle people came in with a different philosophy, and it takes awhile to get used to it,” he says.

Glidden says customers will also have to become acclimated to shifting to such a large supplier. “There’s more red tape, working with a larger company, and it’s even more difficult to get your product,” he says.

Despite the possible challenges ahead, Jerry Larson, president of Larson Glass Co. in Puyallup, Wash., says he is optimistic about a merged Efco-Pella. “I was told Efco’s management team will stay in place. I just don’t see any downside to this move,” Larson says. “I’ve dealt with both companies … they’re both very professional to deal with.”

Stay tuned to e-glass weekly and for updates.

Send us your comments about a possible deal.

Katy Devlin, e-Newsletter Editor, e-glass weekly

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