Masonite gets $1.8 billion term loans, $980 million bridge commitment

By Sara Rosenberg

New York, Dec. 18 – Masonite International Corp. has received commitments for up to $1.8 billion in senior secured term B loans and up to $980 million in senior secured bridge loans to support its acquisition of PGT Innovations Inc., according to an 8-K filed with the Securities and Exchange Commission on Monday.

Jefferies Finance LLC and Sumitomo Mitsui Banking Corp. provided the debt commitments.

The amount of the term loans will be reduced by the aggregate proceeds of convertible preferred equity securities issued and sold on or prior to the date of completion of the acquisition, and the amount of the bridge loans will be reduced by the aggregate proceeds of senior secured notes or other debt securities issued and sold on or prior to closing.

The company said in a presentation that it plans to issue up to $350 million of mandatory convertible equity for the transaction.

Other funds for the cash portion of the acquisition will come from cash on hand and borrowings under existing credit facilities.

Under the agreement, PGT is being bought for $41.00 per share, comprised of $33.50 in cash and $7.50 in common shares of Masonite. The total transaction value is $3 billion.

Closing is expected in the middle of 2024, subject to approval by PGT shareholders, regulatory approvals and other customary conditions.

At closing, Masonite estimates that its pro forma net leverage will be about 4.1x, but the plan is to reduce leverage to below 3x in around two years post-close using the strength of the combined company’s cash flows and enhanced margin profile.

Masonite is a Tampa, Fla.-based designer, manufacturer, marketer and distributor of interior and exterior doors and door systems. PGT is a North Venice, Fla.-based designer and manufacturer of patio door and window solutions.

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