Odds Are

The recent purchase of Vitro America’s assets by Sun Capital got me to thinking about Mickey Binswanger the other day. He was winding down his career about the time I got into the glass industry. Even at that young age, it was easy to recognize what a powerful force he, his family and his company were in the glass industry. So I figure he would be wondering right about now: What’s going to happen to Binswanger?

For now, let me just focus on Binswanger the retailer and save the distribution company ACI for another time. Primarily a nationwide chain of auto and flat glass retail locations, Binswanger has particular strength in the Deep South and Texas. It also operates under an unusual model for current times in that each branch location has a fair amount of autonomy. That decentralization has served it well in most cases.

Binswanger does not fit so easily into the new super-sized Arch-UGC-Vitro America, and there has been a fair amount of speculation about what will happen to it. So, based on absolutely nothing other than my own reasoning and with no information beyond that (meaning I have talked to no one about this), I’ve included some possible scenarios below. See what you think:

Scenario 1: Sun keeps Binswanger and integrates it into the new combined company. While this may happen in the short-term, it does not make sense for the new mega-company in the long run. Binswanger just doesn’t fit its model or its core activities. Odds of this happening: 3-1.

Scenario 2: Sun pulls Binswanger out as a separate company, but maintains ownership. A bit more probable, especially if Sun needs a bit more time to position Binswanger for sale, but still not likely. Odds: 2-1.

Scenario 3: Sun sells Binswanger. The most likely scenario for the reasons stated above. The auto retail locations would be extremely appealing to certain auto glass chains, the strong architectural branches would attract a limited, though serious group of suitors. The main problem with this scenario is that the almost anachronistic model of selling and servicing auto + flat retail in the same location makes it a difficult sale without breaking the two apart and the way Binswanger is set up makes it difficult to break them apart. The most successful suitor then would likely purchase both together, break the two functions apart and sell off either the auto or the flat and the locations it did not want. Odds: even.

Who then might possibly purchase Binswanger? Since I am in an odds-making mood, here’s my take on that too:

An auto glass chain such as Safelite or Glass America: A likely scenario as many of Binswanger’s location would be of interest to either company. Even odds on this one.

A franchise organization such as Glass Doctor: This scenario has been mentioned a number of times, but I find it very unlikely. Glass Doctor is a franchisor with its own strong branding. It can still sell franchises in the same location as Binswanger branches without having the cost of purchase and rebranding. Odds: 20-1.

A manufacturer with vertically integrated capacity in auto and flat glass: There’s one company in the U.S. that currently meets this description and could fit the bill. And they are in expansion mode on the automotive side and know Sun well from its bankruptcy purchase of Arch (they were a creditor). So if I were a betting women, and you forced me to bet, I’d bet on Guardian.

How about you? Any scenarios you’d like to share? We can adjust the odds right to post … I mean purchase time.

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