Matrix Capital Markets Group (804) 780-0060 - Case Study: Kadant Composites

Case Study: Kadant Composites - Divestiture

Situation

Kadant Composites is a leading manufacturer of composite decking and roofing products under the GeoDeck brands, with national distribution and operations in Green Bay, WI and Bedford, MA. Kadant Composites reported approximately $20mm in revenue.
As a subsidiary of Kadant, Inc. (NYSE: KAI) Kadant Composites no longer fit the strategy of its parent company and the decision was made to divest the business. Complicating the divestiture, was a series of on-going product warranty claims, the lack of a CEO and softening financial performance.

Objective

Matrix assisted Kadant in reviewing strategic alternatives for the composite decking business, including a sale to potential strategic and financial buyers.

Solution

Matrix identified and contacted over 130 potential strategic and financial buyers including numerous distressed private equity investment funds.
Confidential information memoranda were distributed to 36 interested parties and ten indications of interest were received. Ultimately, two aggressive buyers pursued the acquisition.
After completing management presentations, Liberty Diversified Industries, a strategic acquirer with a strong interest to enter the composite decking business, was selected to complete a sale of the business.