Apogee Enterprises Agrees to Buy Latvia's Groglass for Up to 62.5 Million Euros
Apogee Enterprises has entered into a definitive agreement to acquire Groglass, a Riga, Latvia-based maker of high-performance coated glass, for up to 62.5 million euros on a cash-free, debt-free basis, subject to customary closing conditions, according to the company’s Sept. 2 announcement. The release puts that at approximately $72.5 million “at current exchange rates,” its own conversion; no exchange rate is disclosed.
That headline figure is a ceiling, not an upfront payment. The release says the purchase price includes up to 10 million euros, or about $11.6 million on the same stated basis, payable over three years and dependent on Groglass achieving certain financial targets. Apogee said it will fund the purchase with cash on hand and its existing credit facility, and expects to close during the third quarter of fiscal 2027.
Groglass makes anti-reflective and other advanced coatings used in display, architectural and technical applications. The release says it serves customers across global end markets such as museums, electronics and architectural design, a niche where the product is specified for optical clarity rather than bought on price per square foot.
Where it fits
Apogee said it plans to integrate Groglass into its Performance Surfaces segment, the unit the company has been steering toward higher-margin coated and specialty materials rather than commodity architectural glass. “The addition of Groglass will strengthen our position in attractive end markets by bringing differentiated coating technologies and deep materials science expertise,” executive chair and chief executive Don Nolan said in the release.
Apogee expects Groglass to contribute approximately $30 million of revenue in the first 12 months after closing, at an adjusted EBITDA margin of roughly 25%. Adjusted EBITDA margin is a non-GAAP measure. The company also said it has identified at least $4 million of annualized cost synergies to be realized within three years.
Against a company that guided to $1.43 billion to $1.48 billion of full-year fiscal 2027 net sales, roughly $30 million is a small addition on the top line. The margin profile is the point: a 25% adjusted EBITDA margin sits well above the 8.7% Apogee’s Architectural Glass segment posted in the first quarter.
The segment math
In its fiscal 2027 first quarter, reported June 26, Apogee posted net sales of $342.7 million, down 1.1% year over year on lower volume partially offset by favorable pricing. GAAP diluted earnings per share were $0.54 and adjusted diluted earnings per share, a non-GAAP figure, were $0.57. Operating margin widened to 5.5% from 2.0% a year earlier.
The segment detail explains the strategic direction. Architectural Metals lifted its adjusted EBITDA margin to 11.2% from 7.3% on mix and productivity gains. Architectural Glass went the other way, with margin contracting to 8.7% from 18.3% on lower pricing and volume, a swing of nearly ten percentage points in a single year.
Gross margin improved 20 basis points to 21.9%, and selling, general and administrative expense fell 330 basis points as a share of sales. Operating cash flow was $7.4 million against negative $19.8 million a year earlier, and the company returned $15.3 million to shareholders through buybacks and dividends in the quarter.
A pattern of bolt-ons
Groglass is not the first deal of the year. Apogee said in its first-quarter release that its pending acquisition of the Kalwall companies was on track to close in early July, also aimed at higher-growth product lines, and that Kalwall was not expected to materially change fiscal 2027 earnings guidance.
At the first quarter the company guided to full-year fiscal 2027 net sales of $1.43 billion to $1.48 billion, including Kalwall, and adjusted diluted earnings per share of $2.70 to $3.25. The Sept. 2 Groglass release did not revise that outlook, and the deal’s contribution is described in terms of the first 12 months post-close rather than a fiscal-year increment.
The risks are the ordinary ones for acquirers of small overseas businesses. The purchase adds a euro-denominated operation with currency translation exposure, the earnout ties part of the price to targets that have not been disclosed publicly, and the stated $4 million of synergies is a three-year figure rather than an immediate one. Funding from cash and the revolver also draws on the same liquidity that supported the Kalwall transaction earlier in the year.
