PGTI Backs Out on Masonite for New $3.1 Billion DealJanuary 17th, 2024 by Drew Vass, Executive Editor
After a buyout turned merry-go-round for Venice, Florida-based PGT Innovations Inc., officials announced Wednesday they’ve reached a final deal with Miter Brands—more “final” than the deal they made with Masonite in December, it seems. Masonite issued a press release announcing the termination of its agreement to purchase PGTI, instead pocketing an $84 million fee. The company announced a deal with PGTI in December, only to be edged out by Miter Brands.
PGTI’s board determined that a revised proposal from Miter, established January 12, 2024, was superior to the deal PGTI made with Masonite. It took Miter three tries to get it right—ultimately putting up $42 per share in cash for its third offer, with an enterprise value of approximately $3.1 billion. PGTI officials said they’re taking the deal, which reflects a premium of 60% over PGTI’s unaffected closing share price on October 9, 2023.
The “merger agreement” has been unanimously approved by the boards of directors of both companies, officials said.
PGTI president and CEO Jeff Jackson said his company is excited to join forces with Miter, which includes the MI Windows and Doors and Milgard Windows and Doors brands.
“We are thrilled to have reached an agreement with Miter that maximizes value for PGTI shareholders,” Jackson said. “Since PGTI’s founding over 40 years ago, we have delivered profitable growth and created significant shareholder value by serving our customers with the high-quality window and door solutions they need. In Miter, we have found a strong partner that shares our commitment to safety, quality, and innovation.”
The transaction will be financed in part by Koch Equity Development LLC, the principal investment and acquisition arm of Koch Industries Inc. Koch is a current investor in Miter.
“Koch Equity Development is excited to support the DeSoto family along with the entire Miter Brands team in building the most valued window and door brand in America with our third equity investment since 2019,” said Richard Hunt, managing director at Koch Equity Development. “We are confident that Miter [Brand]’s acquisition of PGTI will result in long-term value creation for all of Miter [Brand] stakeholders and constituencies.”
Regarding the cancelled deal, “The decision to waive our right to increase our offer reflects our commitment to financial discipline and rigor in our strategic investments,” said Howard Heckes, president and CEO of Masonite. “We remain focused on the execution of our Doors That Do More growth initiatives and the pursuit of our 2027 financial goals. I am confident in Masonite’s ability to create long-term value for our customers and our shareholders as we continue to deliver reliable supply, drive product leadership and win the sale.”
- In October 2023, Miter Brands (MI Windows and Doors, Milgard Windows and Doors) tendered an offer for PGTI at $1.9 billion. PGTI rejected the deal.
- Days later, a deal was announced with Masonite, in which the company agreed to purchase PGTI for $2.2 billion.
- January 3, PGTI announced a third, unsolicited offer from Miter, this time for $41.50 per share—50 cents higher than the deal with Masonite.
- January 17, PGTI and Masonite announced the deal made between the two companies had been terminated. PGTI will now proceed with a new buyout agreement made with Miter Brands.