Masonite International Corporation (NYSE:DOOR) entered into an agreement to acquire PGT Innovations, Inc. (NYSE:PGTI) for $2.4 billion on December 17, 2023. Consideration for each PGT Innovations share comprises of (i) $33.50 per share in cash and (ii) 0.07353 Masonite common shares. Masonite intends to fund the cash portion of the merger consideration with a combination of cash on hand, borrowings under existing credit facilities and the proceeds from new debt and/or equity financing. Masonite has received $1.8 billion in senior secured term loan commitments and $980 million in bridge loan commitments from Jefferies Finance LLC and Sumitomo Mitsui Banking Corporation in connection with the transaction. Masonite will issue up to $350 million mandatory convertible preferred equity to fund a portion of the cash consideration. Upon completion of the transaction, Masonite shareholders will own approximately 84% of the combined company, with PGT Innovations shareholders owning approximately 16%. Howard Heckes will continue to serve as Chief Executive Officer of Masonite. At the closing, Jeff Jackson, PGT Innovations Chief Executive Officer, and one additional PGT Innovations director will join the Masonite Board of Directors. The agreement provides for the payment of termination fees upon termination of the agreement under certain specified circumstances. PGTI will be obligated to pay Masonite a termination fee of $84 million and Masonite will be obligated to pay PGTI a termination fee of $180 million.

The Boards of Directors of both Masonite and PGT Innovations have each unanimously approved the transaction. The transaction is subject to approval by the PGT Innovations shareholders, as well as the receipt of required regulatory approvals, the authorization for listing on the NYSE of the Masonite common shares to be issued to PGTI stockholders in the merger, the effectiveness of the registration statement on Form S-4 to register the Masonite common shares to be issued in the merger, the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and satisfaction of other customary closing conditions. The transaction is currently anticipated to close in the middle of 2024. Transaction expected to be accretive to Masonite?s earnings in first full year post close.

Jefferies LLC acted as financial advisor to Masonite. Benjamin M. Roth and Elina Tetelbaum of Wachtell, Lipton, Rosen & Katz acted as legal counsel and Simpson Thacher & Bartlett LLP acted as financing counsel to Masonite. Evercore acted as financial advisor and John D. Amorosi, Evan Rosen, Shane Tintle, Kyoko Takahashi Lin, Arthur J. Burke, Patrick E. Sigmon and Michael Mollerus of Davis Polk & Wardwell LLP acted legal counsels to PGT Innovations.

Masonite International Corporation (NYSE:DOOR) cancelled the acquisition of PGT Innovations, Inc. (NYSE:PGTI) on January 16, 2024. This termination follows the Masonite Board of Directors? decision not to submit a revised offer to acquire PGT Innovations, after being notified that the PGTI Board had determined that a revised proposal from MITER Brands submitted on January 12, 2024, was a ?superior proposal.? As per terms of the Merger Agreement, PGT Innovations paid to Masonite a termination fee of $84.0 million in cash.