Chromaluxe parent UW Solutions announces acquisition by Apogee

Publicly traded Apogee Enterprises, Inc. announced it entered into a definitive agreement to acquire UW Interco, LLC (“UW Solutions”) from Heartwood Partners for $240 million in cash, subject to customary closing conditions. The transaction will close during the company’s fiscal 2025 third quarter. According to the Apogee press release: “the purchase price represents a multiple of approximately 8.5x UW Solutions’ estimated adjusted EBITDA for fiscal 2026, inclusive of run-rate cost synergies of $5 million and net of an approximately $27 million tax step-up benefit provided by the transaction. The transaction is expected to be accretive to Apogee’s long-term financial profile, including revenue growth rate and adjusted EBITDA margin, and will be accretive to adjusted diluted EPS beginning in fiscal 2026. The acquisition is expected to contribute approximately $100 million of revenue with an adjusted EBITDA margin of approximately 20% in fiscal 2026.”

UW Solutions is a Louisville, KY-based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. The company serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. The business has a portfolio of well-known brands, including ResinDEK, ChromaLuxe, RDC Coatings, and Unisub, each known as a leader in its specified applications. UW Solutions has an additional manufacturing location in Pittsburgh and sales offices in Cincinnati, Belgium, and Australia,

Given similar core process technologies and coating expertise, Apogee plans to integrate UW Solutions into its Large-Scale Optical segment to create a scalable growth platform in the specialty coatings and materials market, the company said. The integration plan is expected to provide $5 million of operational cost synergies by the end of fiscal 2027.

“UW Solutions is a highly strategic acquisition, aligned with our strategy of adding differentiated businesses with a track record of operating excellence to our portfolio,” said Ty R. Silberhorn, CEO, Apogee. “This acquisition will strengthen LSO, our most profitable business segment, and expands our offering of high-performance coated substrate solutions.”

“We are excited to welcome UW Solutions’ employees to Apogee and look forward to working with them to build a powerful new growth engine for our company. We are expanding our product offerings for non-residential construction by providing an entry into manufacturing, warehousing, and distribution center projects, while accelerating our efforts to diversify the LSO segment. We expect meaningful opportunities to utilize the performance coatings capabilities of the combined business to drive long-term growth.”

“This acquisition marks an exciting new chapter for UW Solutions,” said Devlin Riley, CEO of UW Solutions. “Joining forces with Apogee will allow us to leverage their core capabilities and platforms, including the Apogee Management System, to further strengthen our operations and accelerate our growth strategies.

“We are thrilled to become part of the Apogee family. This combination will bring new and expanded opportunities for our employees as we position our business to be a key growth driver within Apogee. Our similar core process technologies and coatings expertise will enable us to expand our reach across a wide range of end-market applications.

Apogee plans to finance the transaction using cash on hand and its existing credit facility. The company expects a post-close Consolidated Leverage Ratio (as defined in its credit facility) of approximately 1.5x. Cleary Gottlieb Steen & Hamilton LLP served as legal counsel to Apogee and Centerview Partners LLC served as financial advisor.

Under Heartwood Partners’ ownership since 2019, UW built out a new management team and successfully grew the business by investing in people, systems, and a second state-of-the-art manufacturing facility. Additionally, the company completed the acquisition of RDC Coatings in 2020, which transformed UW into a vertically integrated coatings manufacturer.

“Heartwood Partners’ willingness to invest in people and importantly fully leverage its internal value creation specialist team and playbook led to this outcome,” said Riley. “The strength and stability of their unique lower-debt structure has allowed UW to grow into a world-class provider of coating solutions. We are excited to partner with Apogee for the next chapter of UW’s growth story.”

“We are proud of our partnership with UW Solutions and the successful outcome that we were able to realize for our investors,” said Demetrios Dounis, Managing Partner at Heartwood Partners. “This represents the third exit for Fund III and another example of how our current cash-yield and lower-leverage model can deliver real wins in any deal market environment. It has been a pleasure partnering with management to transform and grow the business. We look forward to watching the business continue its growth trajectory as part of Apogee.”

Finn Dixon & Herling LLP served as legal advisor and Harris Williams served as financial adviser to UW Solutions and its investors.