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Owens Corning and Masonite International Corporation a leading global provider of interior and exterior doors and door systems, announced that Owens Corning will acquire Masonite for approximately $3.9 billion, implying a purchase multiple of approximately 8.6 times 2023 adjusted EBITDA, a press release from the companies said..
The addition of Masonite’s doors business creates a new growth platform for Owens Corning, the release continued, and it strengthens OC’s position in residential building materials. Leveraging Owens Corning’s go-to-market model serving contractors, builders, and distributors, the company expects to further grow Masonite’s footprint 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 (R and R) 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.”
Strategic Benefits Listed By Owens Corning
- 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 percent 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 percent. 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.
Transaction Details, Timing, and Approvals
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. The transaction will be financed by cash on hand and committed debt financing of $3 billion provided by Morgan Stanley.
Following the closing, Masonite will operate as a reportable segment and will maintain Masonite’s brands and a presence in Tampa, Florida. QR