In an effort to expand into areas that are a natural extension of their steel-making business, Nucor purchases C.H.I Overhead Doors for nearly 3 billion dollars. With the acquisition of C.H.I Overhead Doors, Nucor is set to boost its presence in the construction market, and drastically impact the overhead door industry in a positive way.
C.H.I is a midwest-based overhead door manufacturer that produces garage doors for both commercial and residential markets as well as rolling steel and rubber doors for commercial and industrial applications.
Nucor’s acquisition of C.H.I will include C.H.I’s leadership team, led by their current CEO Dave Bangert, who is expected to remain in place and continue to run the business under the C.H.I name.
Meanwhile, C.H.I hourly employees are set to receive substantial cash payouts on their equity in the company between $20,000 and $800,000 apiece when the deal closes this June.
In total, employees are set to receive $360 million, with the majority going to those under the C-Suite Level. The more than 800 employees are spread across two manufacturing facilities in Illinois, and Indiana as well as many regional warehouses across the U.S.
So what does all this mean for the overhead door industry?
With steel being a primary commodity used in garage doors and rolling doors, the volatility in the steel market is directly impacting garage door manufacturers, leading to a trickle-down effect impacting distributors and finally the customers.
With current global and post-pandemic issues creating limited imports and delays in the supply chain, many garage door manufacturers are unable to source steel for the production of new garage doors.
Steel not being available to garage door manufacturers force them to either wait until the steel is available or find an alternative. Leading to more delays in garage door production, higher costs of steel garage doors, and the possibility of lower-quality materials.
However, Nucor – the largest steel manufacturer in the United States gives C.H.I a competitive advantage well above and beyond its competitors as it has the ability to produce steel and manufacture new garage doors as needed.
With such an advantage over its competitors, we can expect to see C.H.I expand its product line, workforce, and manufacturing, drastically improving its overall distribution capabilities.
Nucor’s advantage doesn’t stop there. Nucor has already established itself as a reliable partner across a diverse portfolio of businesses in the construction industry. These established relationships are likely to favor C.H.I Overhead for their new commercial, residential, and industrial overhead door products, over the competitors. Nucor’s business relationships allow C.H.I to capitalize on companies already knowing and trusting Nucor, the work they do, and the quality of products they supply.
The finalization of the transaction is expected to close in June, pending regulatory approval and closing conditions. It won’t be long before garage door manufacturers are feeling the pressure to catch up to their competition. Garage door dealers such as OGD® are sure to benefit from this new change in the industry and should expect to see more companies innovating their processes to deliver higher quality products and faster delivery times.