Owens Corning to buy Masonite
Toledo, Ohio-based Owens Corning will acquire Masonite, the innovative maker of interior and exterior door systems, in a nearly $4 billion deal.
Owens Corning said the addition of Masonite’s market-leading doors business creates a new growth platform, strengthening the company’s position in residential building materials and extending its offering of highly valued products and brands.
Masonite was founded in 1925. The Tampa-based company designs, manufactures, and markets doors and door systems, with a vertically integrated manufacturing model serving both repair and remodel and new construction demand. It operates 64 manufacturing and distribution facilities, primarily in North America, and has over 10,000 employees globally.
Financial details
Owens Corning will acquire all outstanding shares of Masonite for $133.00 per share in cash, representing an approximate 38% premium to Masonite’s closing share price on Feb. 8.
The implied transaction value is approximately $3.9 billion, implying a purchase multiple of approximately 8.6x 2023E adjusted EBITDA or 6.8x when including synergies of $125 million.
“We are excited by this opportunity to add a scalable new growth platform for our company,” said Brian Chambers, Board Chair and Chief Executive Officer 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 combination of our commercial, operational, and innovation capabilities allows us to accelerate our long-term enterprise growth strategy with a clear line of sight to meaningful synergies and increased cash flow generation.”
Howard Heckes, president and CEO of Masonite, expressed similar optimism for growth. “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.”
Following the closing, Masonite will operate as a reportable segment and will maintain Masonite’s brands and a presence in Tampa, Florida.
Owens Corning said the acquisition of Masonite and entry into doors adds a highly complementary line of innovative products that advances its strategy to expand its building materials offering in residential applications.
With this transaction, Owens Corning grows revenue to $12.6 billion. Owens Corning expects cost synergies of approximately $125 million annually, generated through scale and operational savings, with the majority realized by the end of Year two, after the close.
The transaction will be financed by cash on hand and committed debt financing of $3 billion provided by Morgan Stanley Senior Funding, Inc.
