The AZEK Company Inc., the industry-leading manufacturer of beautiful, low-maintenance and environmentally sustainable outdoor living products, including TimberTech® decking, rail and accessories, and Versatex® and AZEK Trim®, announced its acquisition of StruXure Outdoor, Inc., a designer and manufacturer of high quality and innovative aluminum pergolas and cabanas.
The acquisition expands AZEK’s position in the broader outdoor living category and complements its already strong portfolio of products that benefit from AZEK’s expertise in material conversion and the industry’s long-term secular growth trends.
“Pergolas and cabanas are a nearly $1 billion market opportunity and StruXure, along with our TimberTech products, adds another element to homeowners’ creation of beautiful, low maintenance, and sustainable outdoor living spaces,” said Jesse Singh, CEO of The AZEK Company.
StruXure delivered net sales of approximately $50 million and mid-teens Adjusted EBITDA margins in calendar year 2021, and was named to the Inc. 5000 Fastest-Growing Private Companies list for the seventh consecutive year.
“We believe this acquisition will leverage the collective strengths of both StruXure and TimberTech, enabling synergies that will provide our customers with a more complete outdoor living solution, while expanding StruXure’s margins over time and ultimately driving accelerated growth for both AZEK and StruXure,” Singh said. “Because of the highly complementary nature of the two businesses, we expect StruXure’s business to grow in-line or above the expected revenue growth rate of AZEK’s Residential segment.
"We further intend to apply AZEK’s expertise in sourcing, operations, research and development, and material science to enhance StruXure’s technology-forward product lines and deliver even more of the high-quality outdoor living products customers have come to expect from us,” Singh continued.
This acquisition opens up new customer segments and enables increased cross-marketing and cross-selling to AZEK’s existing partners and customers looking to transform outdoor living spaces with beautiful, low maintenance, and sustainable solutions. StruXure’s innovative, smart pergolas and cabanas are easy to maintain and won’t fade, rot or decay like traditional wood pergolas or structures. The products are highly complementary to TimberTech’s existing outdoor living products, drive wood conversion, and are already being installed together by contractors across North America.
Both of StruXure’s existing product lines are made from up to 50% recycled aluminum and support AZEK’s commitment to ESG stewardship and its strategy to accelerate the use of recycled material in the industry. In fiscal year 2021, AZEK used 500-million pounds of scrap and waste, approximately halfway to its goal of using one billion pounds annually by the end of 2026.
StruXure will operate as a wholly-owned subsidiary of The AZEK Company and Selzer will continue to lead StruXure’s day-to-day operations.
StruXure will become a part of the company’s Residential segment financial reporting. AZEK estimates that StruXure will generate approximately $40 million of revenue for the remainder of AZEK’s fiscal 2022. Given the seasonality of StruXure’s business, contributions to fiscal Q2 are expected to reflect seasonally lower revenue and break-even profitability.