One of Canada’s largest patio door makers is selling out to the family behind the country’s leading garage door manufacturer in a play to keep the company in domestic hands.
The Gendreau family, which owns garage door maker Garaga Inc., in Quebec’s Beauce region, has teamed up with Fonds de solidarité FTQ and Quebec’s investment arm, Investissem*nt Québec (IQ), to buy Novatech Group, based in Sainte-Julie, Que., east of Montreal. Each company generates roughly $500-million in annual sales.
Terms were not disclosed but two sources familiar with the transaction said the buyers are paying more than $500-million for Novatech. The Globe and Mail is not identifying the sources as they are not authorized to discuss the matter.
Garaga and Novatech were both founded in the early 1980s by Michel Gendreau and New Brunswick native Raymond Ouellet, respectively. The two knew each other for years but never competed: While Garaga made garage doors, Novatech started out making decorative door glass before expanding into patio and steel doors. In recent years, the two companies co-ordinated product development and marketing efforts to sell matching doors for their different purposes.
Both companies expanded in recent years, mainly through acquisitions. Garaga bought plants in Oklahoma in 2018 and Minnesota last year, increasing its share of sales from the U.S. to two-thirds, while Novatech has purchased four companies in the past five years, including larger competitor Woodbridge, Ont.-based Sunview Patio Doors in 2021.
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But while Mr. Gendreau passed leadership of Garaga to twin sons Maxime and Martin (daughter Isabelle manages the family office), Mr. Ouellet, who ceded the CEO job to long-time employee Harold Savard 12 years ago, didn’t have children to run the business. So last year, Mr. Ouellet, now in his late 70s, called Mr. Gendreau, asking if he’d be interested in buying his company, including a 30-per-cent stake owned by the Caisse de dépôt et placement du Québec since 2012.
“It was very important for us to continue the business in Canada,” said Mr. Savard, who will remain CEO of Novatech and run it as a stand-alone business with existing management. “We didn’t want to go to market and make a deal with private equity from the U.S. It was very important for us to keep our head office here, in Quebec, in Canada. We keep our brand name, our management team, our values.”
Maxime Gendreau said his family will become majority owners of Novatech through their holding company, keeping Garaga as a separate entity. IQ and the Fonds are contributing more than $150-million combined in debt and equity for their minority stake, while Mr. Savard will roll over his small equity stake into the acquired company.
“It was very important to get patient investors so we could assure we’d maintain ownership” for many years to come, Maxime Gendreau said. He said his family plans “to hold the company for the long term and offer the same stability Mr. Ouellet offered Novatech” for more than 40 years.
