Onex Corp. (TSX:OCX) is increasing its investment in door and window manufacturer JELD-WEN Holding Inc. by 28 per cent to $864-million (U.S.), the private equity firm said Monday.
The Toronto-based firm will invest $675-million for a 58 per cent stake in the U.S. manufacturer's preferred stock, up from a previously contemplated $475-million investment for a 39 per cent stake.
It will also invest $189-million in a convertible note that can be redeemed within 18 months with proceeds from the sale of certain non-core assets or converted into additional preferred stock.
The investment will be made by Onex and Onex Partners III, its flagship private equity fund.
The transaction is anticipated to close in the third quarter. Onex' share of the investment will be about $295-million.
The rest of the company will be owned by the trust of Richard Wendt, members of the Wendt family, JELD-WEN employees and other existing shareholders.
The company will continue to be headquartered in Klamath Falls, Ore.
Onex managing director Anthony Munk said Onex' investment thesis has not changed.
"We believe JELD-WEN is very well positioned to take advantage of the eventual recovery in global housing markets given its competitive position and well-known brands in markets around the world," he said in a news release.
The investment in the window and door maker comes as the U.S. home construction market remains stalled after two terrible years.
Rod Wendt, son of JELD-WEN's late founder Richard Wendt, will continue as chief executive.
Onex' building products industrial partner Philip Orsino will become president. He was CEO of Masonite International until 2005 and has more than 25 years' experience in the door- and window-manufacturing business.
Onex will appoint four of the eight directors on JELD-WEN's board.
Founded in 1960, JELD-WEN has grown to become one of the world's largest residential door and window companies.
It has 123 manufacturing and distribution centres and employs 20,000 people in more than 25 countries around the world.
In 2010, the company had more than $3-billion in revenue.
The investment comes on the heels of Onex's US$2.1-billion sale of Husky International, a maker of injection moulding machines for manufacturers, to the private equity arm of the Ontario Municipal Employees Retirement System and Berkshire Partners, a Boston-based private equity firm.
Onex also sold some 2.7 million shares of aircraft parts maker Spirit AeroSystems Holdings Inc. earlier this year and U.S. ambulance operator Emergency Medical Services Corp.
The company holds investments in a wide range of companies including a large stake in electronics maker Celestica Inc. .
Onex' businesses generate US$35-billion of annual revenues and employ 210,000 people around the world.