NewSouth Window Solutions of Tampa to sell for $92 million

TAMPA — Window manufacturing and installation company NewSouth Window Solutions reached a deal this week to be bought by PGT Innovations of Sarasota County for $92 million.

Founded in 2010, NewSouth makes, sells and installs energy-efficient windows and doors, including impact-resistant residential products, from its 234,500-square-foot factory near Interstate 75 and E Martin Luther King Jr. Boulevard.

NewSouth has 375 employees statewide, nearly 200 of them in Hillsborough County, and seven factory showrooms around Florida, an eighth in Charleston, S.C., and a ninth getting ready to open in the first quarter of next year in the Pensacola-Mobile, Ala. market. Since 2015, its net sales have grown at a 29 percent compounded annual rate and are expected to be $82 million to $85 million this year.

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The company was founded by Dan and Deb Ochstein and Earl and Amy Rahn. Dan and Earl had been employees and equity partners at Champion Window Manufacturing of Cincinnati and both had agreements to stay at Champion for three years following its purchase in 2007.

After that, “I was in my mid-50s and was terrified at the thought of retirement, and I said, ‘Let’s do it again,’ " NewSouth chief executive officer Dan Ochstein said Thursday.

“It has been a wonderful ride,” said Earl Rahn, the company president. Still, after eight years of rapid growth he began interviewing mergers and acquisition specialists about a year ago.

“We felt that we had accomplished quite a bit in Florida, and we wanted to grow and expand beyond Florida, but we needed assistance doing that, both operationally and financially,” Ochstein said. Sixty or 70 potential partners got narrowed down to nine, then to three, then to PGT, a publicly traded company based in Venice.

PGT expects NewSouth to help extend its reach into northern Florida as well as Texas, Louisiana, Georgia and the Carolinas, PGT president and chief executive officer Jeff Jackson said in a call for investors and analysts. PGT also expects the acquisition to help it expand into direct-to-consumer sales without overlapping into the business of its existing network of authorized dealers.

“Quite simply, the segment of consumers targeted and serviced by NewSouth is generally outside the range of consumers serviced by our dealer base,” Jackson said. For example, he said, NewSouth’s consumers tend to have homes with lower values than the high-end and mid-market residences that PGT’s dealers target.

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The sale is expected to close in the first quarter of 2020. NewSouth will retain its name following the acquisition, and will still make its own products. Ochstein, Rahn and vice president for marketing and advertising Amy Rahn have contracts to stay at the company for at least three years. And while merging companies sometimes means cutting suddenly redundant personnel, NewSouth executives don’t expect that to happen here.

“Just the opposite,” Ochstein said. Yes, some employees could move from one position to another. But “with the growth we’re anticipating, it will take everybody that’s here and more to accomplish that.”