Owens Corning has agreed to acquire Masonite International Corp. for USD 3.9 billion, aiming to diversify its residential building product offerings amidst challenges in the US real estate market. The deal is expected to yield USD 12.6 billion in revenue with USD 125 million in annual cost savings. Masonite, with 64 facilities primarily in North America, will operate as a separate segment post-acquisition, maintaining its brand and presence in Tampa, Florida. The announcement led to a surge in Masonite's stock by 34.2%, while Owens Corning's shares fell 8.5%.
Owens Corning has struck a deal to acquire Masonite International Corp., a major player in the door manufacturing industry, in a transaction valued at USD 3.9 billion. This acquisition is aimed at broadening Owens Corning's range of residential building products, a strategic move amidst challenges within the US real estate market, marked by high interest rates and limited inventory.
Under the terms of the agreement, Owens will purchase all outstanding shares of Masonite at USD 133 per share, representing a significant 38.3% premium over Masonite's previous closing price. This announcement sent Masonite's stock soaring by 34.2% before trading began. The combined entity is projected to generate revenue of USD 12.6 billion and achieve annual cost savings of USD 125 million. Additionally, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are forecasted to reach USD 2.9 billion.
Brian Chambers, CEO of Owens Corning, expressed enthusiasm about the acquisition, stating that Masonite's market leadership aligns well with Owens Corning's existing residential product portfolio. Masonite operates 64 manufacturing and distribution facilities primarily in North America, while Owens Corning has a presence in 31 countries.
The deal, slated to close in mid-2024, will see Masonite operating as a separate reportable segment within Owens Corning. The company will retain its brand identity and maintain a presence in Tampa, Florida.
Following the announcement, Masonite's shares surged by approximately 35% to over USD 130 per share, marking a 53% increase in value for the year. Conversely, Owens Corning experienced an 8.5% decline in its stock price, dropping to nearly USD 146 per share.
Masonite had previously entered into a USD 3 billion deal with PGT Innovations in December, which was ultimately abandoned when PGT accepted a higher offer from Mite Brands. Morgan Stanley served as the lead financial advisor to Owens Corning, while Goldman Sachs advised Masonite throughout the acquisition process.
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