Last Friday, Owens Corning and Masonite International Corporation, a global provider of interior and exterior doors and door systems, announced that they have entered into a definitive agreement where OC will acquire all outstanding shares of Masonite for $133.00 per share in cash.

In a Feb. 9 news release, OC said the purchase price represents an approximate 38% premium to Masonite’s closing share price on the NYSE as of Feb. 8, which the company said was “an approximate 46% premium to Masonite’s 20-day volume-weighted average price.” 

The implied transaction value is approximately $3.9 billion, implying a purchase multiple of approximately 8.6x 2023E adjusted EBITDA2 or 6.8x when including synergies of $125 million.

OC said the addition of Masonite’s doors business creates “a new growth platform for Owens Corning, strengthening the company’s position in residential building materials and extending its offering of highly valued products and brands.”

The company added that by leveraging Owens Corning’s “unique commercial capabilities and proven go-to-market model” serving contractors, builders, and distributors, the company expects to build on Masonite’s strong track record of innovation, brand quality, and category excellence.

A brief history of Masonite Doors.

Founded in 1925, Masonite designs, manufactures, and markets doors and door systems, with a vertically integrated manufacturing model serving both repair and remodel and new construction demand. Masonite operates 64 manufacturing and distribution facilities, primarily in North America, and has more than 10,000 employees worldwide.

“We are excited by this opportunity to add a scalable new growth platform for our company,” said Brian Chambers, board chair and CEO of Owens Corning. “Masonite is a market leader that complements our existing residential interior and exterior product offering and has consistently demonstrated top-line growth and margin expansion.”

The purchase brings Masonite under the OC umbrella of interior and exterior products, and, with this transaction, said it will grow company revenue to 12.6 billion, with adjusted EBITDA of $2.9 billion on a “synergized pro forma” basis.

"Our world-class team is transforming the door industry with differentiated solutions for the home,” said Howard Heckes, president and CEO of Masonite. “The combination with Owens Corning enables the acceleration of our ‘Doors That Do More’ strategy while delivering immediate and substantial value to our shareholders.” 

Morgan Stanley & Co. is acting as lead financial advisor to Owens Corning, Lazard Freres & Co. LLC provided additional advice to the Owens Corning Board of Directors, Davis Polk & Wardwell LLP is acting as Owens Corning’s legal counsel, and Stikeman Elliott LLP is acting as Owens Corning's Canadian legal counsel.

Goldman Sachs is acting as the lead financial advisor, and Jefferies is also acting as Masonite's financial advisor. Wachtell, Lipton, Rosen & Katz is acting as Masonite’s legal counsel, and Cassels Brock & Blackwell, LLP is acting as Masonite’s Canadian legal counsel.

The transaction is expected to close in mid-2024, subject to Masonite shareholder approval, regulatory approvals, and other customary closing conditions, including the issuance of interim and final orders by the Supreme Court of British Columbia approving the plan of arrangement.

Following the closing, Masonite will operate as a reportable segment and will maintain Masonite’s brands and presence in Tampa, Fla.

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