Kraftmaid on selling block
MIDDLEFIELD — The parent company of kitchen and bathroom cabinet maker Kraftmaid is trying to sell its window and cabinetry divisions, a move that would include manufacturing facilities in Geauga and Ashtabula counties.
Michigan-based Masco Corporation, which bought Kraftmaid in 1990, announced it expects the sale of the divisions to conclude in the next six to nine months.
The decision was made after the home improvement and building products company finished a review of the two divisions to “evaluate alternatives to best deliver long-term value” for company shareholders, said Masco President and CEO Keith Allman.
“We have determined that pursuing the sale of Masco Cabinetry, Milgard Windows and UK Window Group in three separate transactions is the most appropriate path forward to accomplish this value creation,” Allman said.
The timeline of the sale assumes each of the transactions “can be completed on acceptable terms and conditions,” Allman said.
The deal would include Kraftmaid production facilities in the villages of Middlefield and Orwell. A Masco spokeswoman said the company’s cabinetry division employs more than 4,000 workers in the U.S., however, she did not say how many are employed at the two local plants.
In the short-term, production will “continue as usual,” said Sue Sabo, communications director for Masco.
“Prior to the completion of the divestiture, we expect that business will continue as usual and we do not anticipate any immediate changes in the day-to-day operation of the business,” Sabo said.
There are two production facilities in Middlefield, one on state Route 608 and the other on Industrial Parkway, that combined employ about 2,000 people, said Leslie Gambosi-McCoy, village administrator and economic development director.
“Knowing the strength of the Kraftmaid brand, we are not worried at this point, and we don’t even know at this point what their plan is going into the future,” she said.
Orwell village Manager Joseph J. Varckette said Wednesday he knows as much information as the company released Tuesday, but he intends to follow up to “find out more about where everything stands.
“They have made it apparent it is their intent to sell, so obviously we need to find out what that means — where are they in the process, have they had communication with potential buyers and what overall impact will this decision mean in the village and their facilities in the village?” Varckette said.
Varckette nor the village’s income tax director could say how many employees work at the facility on Grand Valley Avenue.
The sell-off comes as Masco has in the last five years increased its exposure in the repair and remodel segment of the housing market as part of the company’s strategy to “reduce our cyclicality,” Allman said.
It began with spinning off installation services businesses and continued with focusing on Masco’s cabinetry and windows businesses. The company’s announcement completes the process of reducing exposure in new construction to focus on the “less cyclical” plumbing and decorative architectural products businesses, Allman said.
The cabinetry division, headquartered in Ann Arbor, Mich., makes and sells semi-custom, stock and value-priced assembled cabinetry for kitchen, bath, storage, home office and home entertainment applications.
Masco Cabinetry’s Kraftmaid and Cardell products are sold primarily to dealers and home center retailers, and its Merillat and Quality Cabinets products are sold primarily to dealers and homebuilders for home improvement and new home construction.
The company reported cabinetry products net sales of $950 million and an operating profit of $86 million in 2018.