And Just Like That: Masonite Goes From Buyer to SellerFebruary 12th, 2024 by Drew Vass, Executive Editor
The pink panther is coming to doors. That was the news Friday, when Owens Corning, a roofing, insulation and composites manufacturer (that’s well-known for using the character in its marketing) announced a deal to acquire Masonite International Corp. The deal was announced weeks after PGT Innovations dismissed Masonite from its own acquisition, leaving Masonite to pocket an $84 million termination fee. PGTI is now set to be acquired by Miter Brands, instead.
The addition of Masonite to Owens’ lineup creates a new growth platform, officials said.
The $3.9 billion purchase brings Owens Corning into the interior and exterior doors market, growing its revenue and earnings to approximately $12.6 billion. The transaction will be funded by cash on hand and financing of $3 billion, provided by Morgan Stanley Senior Funding Inc.
A segue into entry into doors adds “a highly complementary line of innovative products and advances Owens Corning’s strategy to expand its building materials offering in residential applications,” a company statement said.
Officials for Owens estimate the combined “addressable market” to be around $27 billion, including “commercial, operational and innovation capabilities.” The company also estimates cost synergies of approximately $125 million generated through scale and operational savings.
With the acquisition, Owens’ revenue generated from North American residential applications is expected to grow to 60% of its total revenue.
“Owens Corning has long admired Masonite and been a supply partner to them for a number of years,” Daniel Goldstein, managing director for FGS Global, a company providing communications counsel to Owens, told [DWM].
Masonite operates 64 manufacturing and distribution facilities, primarily across North America, employing over 10,000 globally. Following the acquisition, the company will operate as a reportable segment, maintaining current brands and a presence in Tampa, Florida, officials for Owens said.
“We look forward to welcoming the talented Masonite team to Owens Corning and working with them to deliver enhanced value to customers and shareholders,” said Brian Chambers, board chair and CEO.
With the announcement, Howard Heckes, president and CEO of Masonite, signaled an ongoing commitment to his company’s current focus. “The combination with Owens Corning enables the acceleration of our Doors That Do More strategy, while delivering immediate and substantial value to our shareholders,” Heckes said. “This agreement brings together two storied companies with a common focus on innovation and making life better at home for the people who use our products every day. As we begin our next chapter after nearly 100 years in business, I am looking forward to Masonite joining the Owens Corning team.”
The Boards of Directors of both companies have unanimously approved the transaction, which is expected to close mid-2024, subject to Masonite shareholder approval, regulatory approvals, and other customary closing conditions.
The news was well-received by investors, with Masonite’s stock rising from $96.50 per share Thursday to around $130 per share Friday, immediately following the news. According to the terms of the deal, Owens will acquire all outstanding shares of Masonite for $133 per share in cash.