HOUSTON, Nov. 16, 2018 /PRNewswire/ -- NCI
Building Systems, Inc. (NYSE: NCS), a leading manufacturer of
exterior building products for commercial construction ("NCI" or
the "Company"), announced today that it has completed its merger
with Ply Gem Parent, LLC, a leading manufacturer of exterior
building products for residential construction ("Ply Gem"). The
completion of the transaction follows the satisfaction of all
customary closing conditions, including approval of the merger by
NCI shareholders. Under the terms of the merger agreement, Ply Gem
shareholders received approximately 58.7 million shares of NCI
common stock. NCI shareholders retained a 53% ownership of the
Company's common equity with Ply Gem shareholders now owning
47%.
Chairman and CEO James S. Metcalf
commented, "We are delighted to successfully complete our merger
with Ply Gem today, furthering our strategy to be a market leading
building products company. This combination brings together
industry leaders that will increase our scale, broaden our product
offerings and expand our customer base. In addition, the new
company will be a stronger, more diversified enterprise serving all
channels of the construction markets – residential, repair &
remodel, and commercial.
With the merger now complete, the Company's capital structure
will improve meaningfully. With significant free cash flow
generation and a flexible capital structure, the organization will
be better positioned to manage through the industry's cycles.
Looking ahead, our growth will be driven by our strategic focus on
innovative products, cost savings, margin expansion and debt
reduction. Most importantly, we expect to create long-term value
for our customers, shareholders and employees. I would like to
thank our employees for all their hard work, dedication and support
in accomplishing this transaction," concluded Metcalf.
The Company will operate under a name to be determined, and each
entity will preserve its existing established brands. The Company
will be headquartered in Cary, North
Carolina, with a significant presence in Houston, Texas.
Reporting
NCI's fiscal year-end and fourth quarter 2018 results, as of
October 29, 2018, will be reported on
December 12, 2018. Following this
reporting period, the combined company will move to a calendar
year-end fiscal reporting schedule. Consolidated results for the
transition period from October 29,
2018 through December 31,
2018, which will include the results of Ply Gem beginning
November 16, 2018, will be reported
in February 2019.
Founder's Grants
In accordance with NYSE requirements, the Board of Directors has
authorized, in connection with the consummation of the merger with
Ply Gem, the grant of "employment inducement awards" (within the
meaning of Section 303A.08 of the New York Stock Exchange Listed
Company Manual) to approximately 50 individuals who will become
employees of the Company in connection with the Merger. Forty
percent (40%) of the value of each award will be in the form of
options to purchase shares of the Company's common stock with an
exercise price per share equal to the closing price of a share of
common stock on the grant date (the "Options"), 40% will be in the
form of restricted stock units (the "RSUs"), each representing the
right to acquire one share of the Company's common stock, and 20%
will be in the form of performance share units (the "PSUs"), each
representing the right to acquire a number of shares of the
Company's common stock (up to a maximum of two shares per PSU) to
be determined based upon the achievement of performance metrics as
measured during a two year performance period and one year hold
period following the grant date, subject to the grantee's continued
employment with the Company. The awards will represent an
aggregate value of up to $34.0
million (assuming all of the PSUs vest at maximum levels of
achievement), with the actual number of Options, RSUs and PSUs to
be determined based on today's closing share price. The
Options and RSUs vest in five equal annual installments, subject to
the grantee's continued employment with the Company.
Recipients of the employment inducement awards include the
following officers of the Company:
|
Award Value
($ in millions)
|
James S. Metcalf,
Chairman & Chief Executive Officer
|
$4.5
|
Shawn Poe, Chief
Financial Officer
|
$2.3
|
Art Steinhafel, U.S.
Windows Division President
|
$2.8
|
John Buckley, Siding
Division President
|
$2.8
|
Brian Boyle, Chief
Accounting Officer
|
$0.9
|
Advisors
Evercore served as exclusive financial advisor and Wachtell,
Lipton, Rosen & Katz served as legal counsel to NCI. Credit
Suisse is serving as exclusive financial advisor to Ply Gem.
Debevoise & Plimpton provided legal counsel to Ply Gem and to
CD&R. Credit Suisse and RBC Capital Markets, LLC provided
committed financing for the transaction.
About NCI Building Systems and Ply Gem Holdings, Inc.
The combination of NCI and Ply Gem, headquartered in
Cary, NC, establishes a leading
exterior building products manufacturer with a broad range of
products to residential and commercial customers for both new
construction and repair & remodel. With a portfolio of key
products which includes windows, doors, siding, metal wall and roof
systems, engineered commercial buildings, insulated metal panels,
stone and other adjacent products, the Company has more than 20,000
employees across 80 manufacturing, distribution and office
locations throughout North
America. For more information, visit
www.ncibuildingsystems.com or www.plygem.com.
Contact:
K. Darcey
Matthews
Vice President, Investor Relations
281-897-7785
Forward-looking statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "believe,"
"anticipate," "guidance," "plan," "potential," "expect," "should,"
"will," "forecast" and similar expressions are intended to identify
forward-looking statements in this release. Such forward-looking
statements reflect current expectations and actual results could
differ materially from those projected in the forward-looking
statements as a result of certain risk factors, including but not
limited to: risks and uncertainties relating to the Merger,
including potential adverse reactions or changes to business or
employee relationships resulting from the completion of the Merger;
the possibility that the anticipated benefits of the Merger are not
realized when expected or at all, including as a result of the
impact of, or problems arising from, the integration of the two
companies; the ability to implement the anticipated business plans
of the combined company and achieve the anticipated benefits and
savings; the possibility that the Company may not be able to
achieve expected synergies and operating efficiencies in connection
with the Merger within the expected time-frames or at all; changes
in residential and commercial construction demands, driven in part
by fluctuating interest rates, demographic shifts and customer
trends; the ability of NCI and Ply Gem to integrate their
businesses; the outcome of any legal proceedings related to the
Merger; industry cyclicality and seasonality and adverse weather
conditions; volatility in the U.S. economy and abroad, generally,
and in the credit markets; changes in foreign currency exchange and
interest rates; our ability to generate significant cash flow
required to service or refinance our existing debt and obtain
future financing; our substantial indebtedness and our ability to
incur substantially more indebtedness; our ability to comply with
the financial tests and covenants in our existing and future debt
obligations; commodity price increases and/or limited availability
of raw materials, including steel; retention and replacement of key
personnel; volatility of NCI's stock price; potential future sales
of NCI's common stock held by funds affiliated with Clayton Dubilier & Rice and Golden Gate
Private Equity (the "Sponsor Investors"); substantial governance
and other rights held by the Sponsor Investors; changes in laws or
regulations, including the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2009. See also the "Risk Factors"
in the Company's Annual Report on Form 10-K for the fiscal year
ended October 29, 2017 and in the
Company's Proxy Statement related to the Special Shareholder
Meeting filed October 17, 2018 and
other risks described in documents subsequently filed by the
Company from time to time with the SEC, which identify other
important factors, though not necessarily all such factors, that
could cause future outcomes to differ materially from those set
forth in the forward-looking statements. The Company expressly
disclaims any obligation to release publicly any updates or
revisions to these forward-looking statements, whether as a result
of new information, future events, or otherwise.
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SOURCE NCI Building Systems, Inc.