- Expands Owens Corning’s leadership position in branded
residential products with a leading manufacturer of innovative
interior and exterior doors and door systems
- Creates a scalable new growth platform within a $27 billion
addressable market leveraging combined commercial, operational, and
innovation capabilities
- Enhances Owens Corning’s attractive financial profile by
growing revenue and earnings to approximately $12.6 billion, with
adjusted EBITDA of $2.9 billion on a pro forma basis1 including
cost synergies of approximately $125 million generated through
scale and operational savings
- Reinforces disciplined capital allocation strategy with net
debt-to-EBITDA resulting from the transaction in the 2-3x target
range and additional deleverage to 2.0x by year-end 2024; low
double-digit percentage accretive to free cash flow by end of
2025
- Owens Corning also announces strategic review of its glass
reinforcements business within the company’s Composites
segment
- Owens Corning will host investor and analyst call today at 8:30
a.m. ET
Owens Corning (NYSE: OC), a leader in global building and
construction materials, and Masonite International Corporation
(“Masonite”) (NYSE: DOOR), a leading global provider of interior
and exterior doors and door systems, today announced they have
entered into a definitive agreement under which 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 February 8, 2024 and 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.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240208177032/en/
The addition of Masonite’s market-leading 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. 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 to further grow in the doors
market.
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 over 10,000 employees
globally.
“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. We look forward to welcoming the talented Masonite team
to Owens Corning and working with them to deliver enhanced value to
customers and shareholders.”
"Our world-class team is transforming the door industry with
differentiated solutions for the home,” said Howard Heckes,
President and Chief Executive Officer 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. 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. As we begin
our next chapter after nearly 100 years in business, I am looking
forward to Masonite joining the Owens Corning team.”
Strategic and Financial Benefits
- Expands Owens Corning’s Leadership
Position in Branded Residential Building Products: The
acquisition of Masonite and entry into doors adds a highly
complementary line of innovative products and advances Owens
Corning’s strategy to expand its building materials offering in
residential applications. Both companies provide best in class
products and brands, focus on building strong customer
partnerships, and differentiate through quality, service,
sustainability, and innovation. With the acquisition, Owens
Corning’s revenue generated from North American residential
applications will grow to 60% of its total revenue.
- Creates Scalable New Growth Platform
Leveraging Combined Commercial, Operational, and Innovation
Capabilities: Owens Corning expects to leverage both
companies’ best in class brands, extensive customer and channel
knowledge, manufacturing excellence, and material science expertise
to grow Masonite’s top-line reaching adjusted EBITDA margins of
approximately 20%. The acquisition also increases Owens Corning’s
total addressable market by $27 billion and creates a platform to
drive new growth opportunities in other product adjacencies.
- Enhances Owens Corning’s Attractive
Financial Profile: With this transaction, Owens Corning
grows revenue to $12.6 billion, with adjusted EBITDA of $2.9
billion on a synergized pro forma basis1 and with reduced ongoing
capital intensity. 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
2 post-close. The acquisition drives meaningful shareholder value
creation with ROIC exceeding Owens Corning’s cost of capital by the
end of Year 3 post-close.
- Generates Strong Free Cash Flow to
Support Rapid Deleveraging and Capital Allocation Strategy:
On a synergized basis, the acquisition is expected to be low
double-digit percentage accretive to free cash flow by the end of
2025. After accounting for transaction financing, Owens Corning
expects net debt-to-EBITDA well within its stated 2-3x target
range, deleveraging to 2.0x by year-end 2024. Owens Corning is
committed to maintaining its solid investment grade rating and
returning approximately 50% of free cash flow to shareholders over
time.
Transaction Details, Timing, and Approvals
The transaction will be implemented by way of a statutory plan
of arrangement pursuant to the Business Corporations Act (British
Columbia). The Boards of Directors of both companies have
unanimously approved the transaction. The transaction is expected
to close 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. The
transaction will be financed by cash on hand and committed debt
financing of $3 billion provided by Morgan Stanley Senior Funding,
Inc.
Following the closing, Masonite will operate as a reportable
segment and will maintain Masonite’s brands and a presence in
Tampa, Florida.
Advisors
Morgan Stanley & Co. LLC is acting as lead financial advisor
to Owens Corning, Lazard Freres & Co. LLC provided additional
advice to the Owens Corning Board of Directors, and 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 lead financial advisor, and Jefferies
also is acting as financial advisor, to Masonite. Wachtell, Lipton,
Rosen & Katz is acting as Masonite’s legal counsel, and Cassels
Brock & Blackwell, LLP is acting as Masonite’s Canadian legal
counsel.
Strategic Review of Glass Reinforcements Business
Separately, Owens Corning has also announced today the launch of
a formal strategic review process for its glass reinforcements
business, which is part of the company’s Composites segment. That
press release can be found at https://newsroom.owenscorning.com
Conference Call Details
Owens Corning will host a conference call and webcast today:
Friday, February 9, 2024 8:30 a.m. Eastern Time
Callers
- Live dial-in telephone number: U.S. 1.833.470.1428; Canada
1.833.950.0062; and other international locations
+1.404.975.4839.
- Entry number: 396050 (Please dial in 10-15 minutes
before conference call start time)
- Live webcast: https://events.q4inc.com/attendee/893218776
Telephone and Webcast Replay
- Telephone replay will be available one hour after the end of
the call through February 16, 2024.
In the U.S., call 1.866.813.9403. In Canada, call
1.226.828.7578. In other international locations, call
+1.929.458.6194.
- Conference replay number: 419249
- Webcast replay will be available using the above link.
As previously announced, Owens Corning and Masonite will release
their fourth-quarter and full-year 2023 earnings results on
February 14, 2024, and February 19, 2024, respectively. Masonite
has cancelled its conference call for February 20, 2024.
About Owens Corning
Owens Corning is a global building and construction materials
leader committed to building a sustainable future through material
innovation. Our three integrated businesses – Roofing, Insulation,
and Composites – provide durable, sustainable, energy-efficient
solutions that leverage our unique material science, manufacturing,
and market knowledge to help our customers win and grow. We are
global in scope, human in scale with approximately 18,000 employees
in 30 countries dedicated to generating value for our customers and
shareholders and making a difference in the communities where we
work and live. Founded in 1938 and based in Toledo, Ohio, USA,
Owens Corning posted 2022 sales of $9.8 billion. For more
information, visit www.owenscorning.com.
About Masonite
Masonite is a leading global designer, manufacturer, marketer
and distributor of interior and exterior doors and door systems for
the new construction and repair, renovation and remodeling sectors
of the residential and non-residential building construction
markets. Since 1925, Masonite has provided its customers with
innovative products and superior service at compelling values.
Masonite currently serves approximately 7,000 customers globally.
Additional information about Masonite can be found at
www.masonite.com.
Additional Information and Where to Find It
In connection with the transaction, Masonite expects to file
with the SEC and furnish to its shareholders a proxy statement on
Schedule 14A (the “Proxy Statement”),
as well as other relevant documents regarding the transactions
contemplated by the Arrangement Agreement (the “Agreement”) by and among Masonite, Owens Corning,
and MT Acquisition Co ULC (the “Transaction”). The information in the preliminary
Proxy Statement will not be complete and may be changed. After
filing its definitive Proxy Statement with the SEC, Masonite will
mail its definitive Proxy Statement and a proxy card to Masonite’s
shareholders entitled to vote at a special meeting relating to the
Transaction, seeking their approval of the respective
Transaction-related proposals. The Proxy Statement will contain
important information about the Transaction and related matters.
This communication is not a substitute for the Proxy Statement
Masonite may file with the SEC in connection with the
Transaction.
INVESTORS AND SECURITY HOLDERS OF MASONITE ARE URGED TO READ
CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT WHEN IT BECOMES
AVAILABLE, AS WELL AS OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE
INTO THE PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO THESE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT MASONITE, OWENS CORNING, THE TRANSACTION AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE AGREEMENT THAT HOLDERS OF
MASONITE’S SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION
REGARDING VOTING.
Investors and security holders will be able to obtain free
copies of the Proxy Statement and other documents filed with the
SEC when available without charge through the website maintained by
the SEC at www.sec.gov or, in the case of documents filed by
Masonite, by directing a request to Marcus Devlin, Director,
Investor Relations at investorrelations@masonite.com, or by calling
813-877-2726, or from Masonite’s website
https://investor.masonite.com, or, in the case of documents filed
by Owens Corning, by directing a request to Amber Wohlfarth, Vice
President, Investor Relations at Amber.Wohlfarth@owenscorning.com,
or by calling 419-248-5639, or from Owens Corning’s website
https://investor.owenscorning.com/investors.
Participants in the Solicitation
Masonite, Owens Corning and certain of their directors,
executive officers and employees may be deemed to be participants
in the solicitation of proxies in respect of the Transaction.
Information regarding the persons who may, under the rules of
the SEC, be deemed participants in the solicitation of proxies in
connection with the Transaction, including a description of their
direct or indirect interests in the Transaction, by security
holdings or otherwise, will be set forth in the Proxy Statement(s)
and other relevant materials related to the Transaction when they
are filed with the SEC.
Information regarding Masonite’s directors and executive
officers is contained in the section entitled “Corporate
Governance; Board and Committee Members” included in Masonite’s
proxy statement for the 2023 annual meeting of stockholders, which
was filed with the SEC on March 29, 2023 (and which is available at
https://www.sec.gov/Archives/edgar/data/893691/000119312523083032/d326829ddef14a.htm)
and in the section entitled “Directors, Executive Officers and
Corporate Governance” included in Masonite’s Annual Report on Form
10-K for the year ended January 1, 2023, which was filed with the
SEC on February 28, 2023 (and which is available at
https://www.sec.gov/Archives/edgar/data/893691/000089369123000013/door-20230101.htm).
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement(s) filed by Masonite and other relevant
materials to be filed with the SEC in connection with the
Transaction when they become available. Free copies of such proxy
statement(s) and such other materials may be obtained as described
in the preceding section.
Information regarding the directors and executive officers of
Owens Corning is contained in the sections entitled “Information
Concerning Directors” and “Security Ownership of Executive Officers
and Directors” included in Owens Corning’s proxy statement for its
2023 annual meeting of stockholders, filed with the SEC on March 9,
2023 (and which is available at
https://www.sec.gov/Archives/edgar/data/1370946/000119312523066160/d397228ddef14a.htm),
in the section entitled “Information About Our Executive Officers”
included in Owens Corning’s Annual Report on Form 10-K for the year
ended December 31, 2022, which was filed with the SEC on February
15, 2023 (and which is available at
https://www.sec.gov/Archives/edgar/data/1370946/000137094623000010/oc-20221231.htm),
in Owens Corning’s Form 8-K filed on August 24, 2023 (and which is
available at
https://www.sec.gov/Archives/edgar/data/1370946/000119312523220160/d541239d8k.htm)
and in Owens Corning’s Form 8-K filed on August 8, 2023 (and which
is available at
https://www.sec.gov/Archives/edgar/data/1370946/000119312523206275/d495928d8k.htm).
To the extent holdings of Owens Corning securities by the directors
and executive officers of Owens Corning have changed from the
amounts of securities of Owens Corning held by such persons as
reflected therein, such changes have been or will be reflected on
Statements of Change in Ownership on Form 4 filed with the SEC.
These documents can be obtained free of charge from the sources
indicated above.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements present current forecasts and estimates of future
events. These statements do not strictly relate to historical or
current results and can be identified by words such as
“anticipate,” “appear,” “assume,” “believe,” “estimate,” “expect,”
“forecast,” “intend,” “likely,” “may,” “plan,” “project,” “seek,”
“should,” “strategy,” “will,” “can,” “could,” “predict,” “future,”
“potential,” “intend,” “forecast,” “look,” “build,” “focus,”
“create,” “work,” “continue,” “target,” “poised,” “advance,”
“drive,” “aim,” “approach,” “seek,” “schedule,” “position,”
“pursue,” “progress,” “budget,” “outlook,” “trend,” “guidance,”
“commit,” “on track,” “objective,” “goal,” “opportunity,”
“ambitions,” “aspire” and variations of negatives of such terms or
variations thereof. Other words and terms of similar meaning or
import in connection with any discussion of future plans, actions,
events or operating, financial or other performance identify
forward-looking statements.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements regarding
the Agreement and the Transaction, including the expected time
period to consummate the Transaction, the anticipated benefits
(including synergies) of the Transaction and integration and
transition plans, opportunities, anticipated future performance,
expected share buyback programs and expected dividends. All such
forward-looking statements are based upon current plans, estimates,
expectations and ambitions that are subject to risks,
uncertainties, assumptions and other factors, many of which are
beyond the control of Masonite and Owens Corning, that could cause
actual results to differ materially from the results projected in
such forward-looking statements. These risks, uncertainties,
assumptions and other factors include, without limitation:
statements regarding the expected timing and structure of the
Transaction; the ability of the parties to complete the
Transaction; the expected benefits of the Transaction, such as
improved operations, enhanced revenues and cash flow, synergies,
growth potential, market profile, business plans, expanded
portfolio and financial strength; the timing, receipt and terms and
conditions of any required governmental, court and regulatory
approvals of the Transaction; the ability of Owens Corning to
successfully integrate the operations of Masonite and to achieve
expected synergies; cost reductions and/or productivity
improvements, including the risk that problems may arise which may
result in the combined company not operating as effectively and
efficiently as expected; the occurrence of any event, change or
other circumstances that could give rise to the termination of the
Agreement; the possibility that Masonite’s shareholders may not
approve the Transaction; the risk that the anticipated tax
treatment of the Transaction is not obtained; the risk that the
parties may not be able to satisfy the conditions to the
Transaction in a timely manner or at all; risks related to
disruption of management time from ongoing business operations due
to the Transaction; the risk that any announcements relating to the
Transaction could have adverse effects on the market price of
Masonite’s or Owens Corning’s common shares; the risk that the
Transaction and its announcement could have an adverse effect on
the parties’ business relationships and businesses generally,
including the ability of Masonite and Owens Corning to retain
customers and retain and hire key personnel and maintain
relationships with their suppliers and customers, and on their
operating results and businesses generally; unexpected future
capital expenditures; potential litigation relating to the
Transaction that could be instituted against Masonite and/or Owens
Corning or their respective directors and/or officers; third party
contracts containing material consent, anti-assignment, transfer or
other provisions that may be related to the Transaction which are
not waived or otherwise satisfactorily resolved; the competitive
ability and position of Owens Corning following completion of the
Transaction; legal, economic and regulatory conditions; and any
assumptions underlying any of the foregoing; levels of residential
and commercial or industrial construction activity; demand for
Masonite and Owens Corning products; industry and economic
conditions including, but not limited to, supply chain disruptions,
recessionary conditions, inflationary pressures, interest rate and
financial market volatility and the viability of banks and other
financial institutions; availability and cost of energy and raw
materials; levels of global industrial production; competitive and
pricing factors; relationships with key customers and customer
concentration in certain areas; issues related to acquisitions,
divestitures and joint ventures or expansions; various events that
could disrupt operations, including climate change, weather
conditions and storm activity such as droughts, floods, avalanches
and earthquakes, cybersecurity attacks, security threats and
governmental response to them, and technological changes;
legislation and related regulations or interpretations, in the
United States or elsewhere; domestic and international economic and
political conditions, policies or other governmental actions, as
well as war and civil disturbance; changes to tariff, trade or
investment policies or laws; uninsured losses, including those from
natural disasters, catastrophes, pandemics, theft or sabotage;
environmental, product-related or other legal and regulatory
unforeseen or unknown liabilities, proceedings or actions; research
and development activities and intellectual property protection;
issues involving implementation and protection of information
technology systems; foreign exchange and commodity price
fluctuations; levels of indebtedness; liquidity and the
availability and cost of credit; rating agency actions and
Masonite’s and Owens Corning’s ability to access short- and
long-term debt markets on a timely and affordable basis; the level
of fixed costs required to run Masonite’s and Owens Corning’s
businesses; levels of goodwill or other indefinite-lived intangible
assets; labor disputes or shortages, changes in labor costs and
labor difficulties; effects of industry, market, economic, legal or
legislative, political or regulatory conditions outside of
Masonite’s or Owens Corning’s control; and other factors detailed
from time to time in Masonite’s and Owens Corning’s SEC
filings.
All forward-looking statements in this communication should be
considered in the context of the risks and other factors described
above and in the specific factors discussed under the heading “Risk
Factors” in both Masonite’s and Owens Corning’s most recent Annual
Report on Form 10-K filed with the SEC, in each case as these risk
factors are amended or supplemented by subsequent Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, which will be
incorporated by reference into the Proxy Statement. Masonite’s
reports that are filed with the SEC are available on Masonite’s
website at https://investor.masonite.com/ and on the SEC’s website
at http://www.sec.gov, and Owens Corning’s reports that are filed
with the SEC are available on Owens Corning’s website at
https://investor.owenscorning.com/investors and on the SEC website
at http://www.sec.gov. Any forward-looking statements speak only as
of the date the statement is made and neither Masonite nor Owens
Corning undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. It is not
possible to identify all of the risks, uncertainties and other
factors that may affect future results. In light of these risks and
uncertainties, the forward-looking events and circumstances
discussed herein may not occur and actual results may differ
materially from those anticipated or implied in the forward-looking
statements. Accordingly, readers are cautioned not to place undue
reliance on any forward-looking statements.
(1) Based on Wall Street consensus estimates plus $125 million
run-rate synergies and pro forma for $150 million revenue and $35
million adjusted EBITDA contribution from Fleetwood. Excludes costs
to achieve synergies.
(2) Based on Wall Street consensus estimates plus pro forma for
$35 million adjusted EBITDA contribution from Fleetwood
Owens Corning Company News / Owens Corning Investor Relations
News
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240208177032/en/
Owens Corning
Megan James Media Relations megan.james@owenscorning.com
419.348.0768
Amber Wohlfarth Investor Relations
amber.wohlfarth@owenscorning.com 419.248.5639
Or
FGS Global Jared Levy / Niel Golightly / Dan Goldstein
owenscorning@fgsglobal.com
Masonite
Richard Leland VP, Finance and Treasurer rleland@masonite.com
813.739.1808
Marcus Devlin Director, Investor Relations mdevlin@masonite.com
813.371.5839
Tali Epstein / Jim Golden / Jude Gorman Collected Strategies
Masonite-CS@collectedstrategies.com
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