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The Unifix Acquisition

Sam Schiffman, vice president, Legal Department, as told to Nancy Spurlock -- 2010

National Gypsum had been buying Wonder Board, a cement backerboard, for resale. Wonder Board was no longer going to be available, but the company stumbled across a little business in Bromont, Quebec -- Unifix, Inc.

Unifix had been in business 10 years. Elaine Beaudoin, daughter of Laurent Beaudoin, chairman of Bombardier, had formed the company around a new edge configuration for cement backerboard. Beaudoin built a plant to produce the new product. The company was sued by USG for patent infringement. It worked out an agreement with USG and started building a plant in Jacksonville, FL, in 1997.

In the spring of 1998, Page Odom, who headed Business Development, and Sam Schiffman, who headed the Legal Department, were brought in to work on a purchase agreement with Unifix. Neither men had ever worked with a French Canadian business.

In less than a day, National Gypsum and Unifix had a letter of intent. The discussions were informal. Odom negotiated while Schiffman worked on his laptop to draw up the documents.

The Beaudoins would not let anyone from National Gypsum see the plant because of the proprietary edge technology. Finally, National Gypsum was allowed to go in one area and leave. Then, representatives could go in another area and leave. It was well into November 1998 before National Gypsum could see the entire operation.

 

Price was a stumbling block. National Gypsum wanted to pay $25 million to $30 million. Beaudoin wanted $70 million. Schiffman went to the bathroom and, when he returned, Odom had negotiated a deal payable over five years. The company made payments every December.

The acquisition made sense the National Gypsum board. Unifix had a unique patented product and good technology behind it. The product would bring a higher price than gypsum board, and it was expected to be more stable in a down market. The acquisition was good for Unifix, too. It needed a partner to grow the business.

The key to the successful integration of the business was CEO Tony Maraia's decision to "leave them as they are." There were some changes in operating issues including emphasis on safety, but Unifix was set up as a separate business with its own controller and technical people. The Unifix brand was strong and culturally it had done well as a French Canadian company.

The signing date and the closing date were on the same day. All documents were signed on December 15, 1998. Unifix was accretive to National Gypsum earnings from day one, a hallmark of a good acquisition.