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Fit & Finish: The billionaires club…are you in or out?

Regulations are hollowing out the fenestration middle class.


October 16, 2019
By Chris Meiorin

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If you are reading this, the degrees of separation between you and your local billionaires club is less than you think.

As the fenestration industry continues to evolve, so does the news of mergers and acquisitions within the industry. But where typically the values have been reported in the millions of dollars, the B-word is now creeping into the discussion and bringing with it greater challenges to the small and medium-sized assemblers that once dominated the fenestration industry. Never has this been more evident while reading of the recent purchase of several large window and door companies by private equity groups. With reports of a price tag exceeding $2 billion dollars U.S. for the takeover of Ply Gem Holdings and Atrium Windows and Doors by private equity firms, we see the chasm that separates the small companies from the now larger-than-life conglomerates.

While it’s easy to buy into the idea that traditional large companies can’t innovate at the same pace as their smaller counterparts, the large corporation is more likely to maintain its dominant position by acquiring its smaller cousins and essentially buying market share. Add to this the growing R&D expenditures of large firms and the increasing pressures (and costs) of product certification, the gap between large and small companies will continue to grow. This fact, however, may bring some success to the micro and niche operators, who often work outside of the usual regulatory bodies and cater to a specific demographic. With continued suggestions of unreported earnings within this segment of the market, the gap between large and small companies remains at an all-time high.

Ask any fenestrator that has sat through any of NRCan’s recent Market Transformation Roadmap meetings. The beads of sweat that appear on their foreheads are largely due to the burning question of how to finance the R&D needed to conform to the new reality mandated by the government. Everything from engineering, testing and even labeling now requires the continued input and monitoring of professional service providers, which are often out of reach of the small manufacturer. Add to this scenario the need for a dedicated HR department to recruit and maintain a workforce in a shrinking labour pool and it suddenly becomes apparent that the operators and owners of fenestration SMEs are no longer able to focus on the day-to-day matters of making windows and doors. Rather, the owners and operators of these companies are spending the bulk of their days navigating the increasing complexity of the Canadian government’s national regulations and trying to better understand how to finance the cost of conforming to a standard for which the technology does not yet exist. The government is off-loading the required R&D onto what is an already fragmented fenestration industry.

Our government continues to grandstand, pretending to lead the world in the transition to a low-carbon economy. Just look at the location of their conference, “Paving the Road to 2030,” in Iqaluit, Nunavut. The location was prohibitive to most all of our industry stakeholders except those travelling on the government’s tab. The report that followed this conference went on to discuss how key stakeholders were assigned to each initiative, including windows and doors, yet these initiatives were moved forward with little or no representation by our industry. The report proudly announces the development of a “national compliance strategy” and the vast amount of R&D that will be required to accommodate these performance initiatives, with little or no mention as to how it will be financed.

So it shouldn’t come as any surprise to read about the next big acquisition or merger in our industry. Nor should it come as a surprise that, with the governments’ continued meddling, fenestration’s “middle class” will potentially cease to exist and take with it the heart that literally drives the Canadian economy.


Chris Meiorin is president of EuroVinyl Windows and Doors in Woodbridge, Ont.