Masonite International Corporation, a designer, manufacturer, and distributor of interior and exterior doors, confirmed the termination of its previously announced definitive merger agreement to acquire PGT Innovations. The deal was first announced in December 2023.
Instead, MITER Brands has entered a definitive agreement to acquire all outstanding shares of PGT Innovations at a price of $42.00 per share, or an enterprise value of approximately $3.1 billion. The purchase price represents a 60% premium over PGT Innovations’ closing share price on Oct. 9, 2023. The merger has been approved by the board of directors of both companies.
Masonite’s decision to terminate the deal follows the Masonite board of directors' decision not to submit a revised offer to acquire PGT Innovations after being notified that the PGT Innovations board had determined that a revised proposal from MITER Brands submitted on Jan. 12, 2024 was a “superior proposal.”
“The decision to waive our right to increase our offer reflects our commitment to financial discipline and rigor in our strategic investments,” Howard Heckes, president and CEO of Masonite. “We remain focused on the execution of our Doors That Do More growth initiatives and the pursuit of our 2027 financial goals. I am confident in Masonite’s ability to create long-term value for our customers and our shareholders as we continue to deliver reliable supply, drive product leadership, and win the sale.”
PGT Innovations said it notified Masonite of its determination of MITER Brands’s offer as a “superior proposal” and Masonite waived its right to improve the terms of its offer. In accordance with PGT Innovations’ merger agreement with Masonite, MITER Brands, on behalf of PGT Innovations, paid the termination fee of $84 million due to Masonite.
“MITER and PGT Innovations are fully aligned in providing world-class service and the finest products with a culture where people, performance, and customer experiences come first,” Matt DeSoto, president and CEO of MITER Brands, said in a prepared statement. “Our product mix and geographic presence are highly complementary, and we look forward to delivering enhanced value to our team members, customers, suppliers, and local communities. The combined company will continue its long-held commitment to innovation, service, and high-quality window and door products as we accelerate our growth trajectory.”
MITER’s transaction with PGT Innovations is expected to close by mid-year 2024. MITER has obtained commitment letters for the financing necessary to complete the transaction, which is not subject to a financing condition. Under the completion of the transaction, PGT Innovations will become a privately held subsidiary of MITER and its common stock will no longer be traded on the NYSE.
“We are thrilled to have reached an agreement with MITER that maximizes value for PGT Innovations shareholders,” Jeffrey Jackson, PGT Innovations president and CEO, said. “Since PGT Innovations’ founding over 40 years ago, we have delivered profitable growth and created significant shareholder value by serving our customers with the high-quality window and door solutions they need. In MITER, we have found a strong partner that shares our commitment to safety, quality, and innovation.”
