UPDATE 1-Ares, Ontario Teachers to buy building products maker CPG
* Financial terms were not disclosed
* Deal could be worth $1.5 bln - sources in July
* Ares, Ontario Teachers' to own equal shares of CPG
* CPG management to retain minority stake
Aug 19 (Reuters) - Ares Management LLC and Ontario Teachers' Pension Plan will buy CPG International Inc, betting on the long-awaited recovery in the building products industry, which has lagged the rebound in the broader U.S. housing market.
Building products makers, like CPG, have not seen the same growth that homebuilders have enjoyed in the past two years as they faced a labor shortage and a lack of financing options.
Financial terms of the deal were not disclosed, but people familiar with the matter told Reuters in July that Ares was one of several private equity bidders and CPG could fetch as much as $1.5 billion.
CPG, owned by private equity firm AEA Investors LP, makes building supplies such as outdoor decking, porch boards and plastic restroom partitions for the residential and commercial markets.
Ares and Ontario Teachers' will own an equal stake in CPG, with the company's management retaining a minority stake.
Scranton, Pennsylvania-based CPG, which get more than $500 million in annual revenue, filed for an initial public offering in 2011 but it never went ahead.
A sale to a private equity firm might be a better option for CPG given recent weakness in the stocks of housing companies.
Real estate investment trust American Homes 4 Rent last month priced its IPO at the low end of its expected price range.
Shares of homebuilder Tri Pointe Homes Inc closed at $15.14 on Friday, below their January IPO price of $19.
Ontario Teachers' and peers such as the Canada Pension Plan Investment Board and Caisse de dépôt et placement du Québec have been among the world's most active dealmakers recently, with major bets on real estate, natural resources and infrastructure.
Sullivan & Cromwell LLP acted as legal adviser and JP Morgan Securities and UBS Investment Bank were financial advisers to Ares and Teachers.
Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal adviser and Barclays and Deutsche Bank Securities Inc were financial advisers to CPG International.