Masonite Tops Miter Brands to Acquire PGT Innovations

December 18th, 2023 by Drew Vass, Executive Editor

Masonite edged out Miter Brands this week, as both companies jockeyed to acquire North Venice, Fla.-based PGT Innovations (PGTI). Masonite’s deal to acquire PGTI follows two rejected offers by Miter, including a $2.2 billion offer last week, Reuters reported. Masonite will acquire PGTI for a combination of cash and shares valued at $3.0 billion.

Howard Heckes will continue to serve as Masonite’s CEO, officials said. After closing, Jeff Jackson, CEO of PGTI, will join Masonite’s board of directors.

Both companies’ boards have unanimously approved the transaction.

Combined, Masonite and PGTI will post $4 billion in revenue, officials reported. On a pro forma basis for the last twelve months ended October 1, 2023, the combined company had approximately $700 million of adjusted EBITDA and over $400 million of free cash flow, officials said. The transaction is expected to be accretive to Masonite’s earnings in the first full year after the deal’s closing.

The deal “substantially increases scale and growth opportunities” for Masonite, officials said, adding to the company’s geographic and end-market mix. The resulting mashup is expected to generate an estimated $100 million in “annual synergies,” including a combination of cost-savings opportunities, as well as incremental sales growth opportunities through cross-selling complementary products. Together, the two companies cover interior doors, exterior doors, hinged and sliding patio doors, non-impact and impact-resistant windows and garage doors.

“The acquisition of PGT Innovations accelerates our strategy and is an exciting and transformational step in the nearly 100-year history of Masonite,” Heckes said. “The PGT Innovations team shares our commitment to innovation and delivering premium products … I look forward to welcoming the talented PGT Innovations employees to Masonite and unlocking the many opportunities this combination presents to deliver compelling long-term value to our customers, employees, partners and shareholders.”

The deal is expected to close in mid-2024, subject to approval by PGTI shareholders, regulatory approvals and satisfaction of other customary closing conditions.

“Today’s announcement is a significant milestone for PGT Innovations, and a testament to the talent and dedication of our team members around the country,” Jackson said. “This transaction will provide significant near-term value to PGT Innovations’ shareholders, while also enabling them to participate in the long-term upside opportunity of the combined company.”

Masonite intends to fund the cash portion of its investment with a combination of cash on hand, borrowings under existing credit facilities and the proceeds from new debt and/or equity financing. The company received $1.8 billion in senior secured term-loan commitments and $980 million in bridge-loan commitments from Jefferies Finance LLC and Sumitomo Mitsui Banking Corp.

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