Masonite returns, sets Monday launch for $1.525 billion credit facility

By Sara Rosenberg

New York, March 1 - Masonite International Corp. is back with its LBO financing package as a bank meeting has been scheduled for Monday to launch the company's $1.525 billion credit facility (B2/BB-), according to a market source.

The facility still consists of a $350 million revolving credit facility and a $1.175 billion term loan B, with price talk unavailable at this time.

The Bank of Nova Scotia and Deutsche Bank are co-lead arrangers on the deal, Deutsche and UBS Securities are co-syndication agents, and SunTrust and Bank of Montreal are agents.

Masonite was previously scheduled to hold the bank meeting during the week of Feb. 14 but a decision was made to cancel the launch because shareholders were expected to turn down Kohlberg Kravis Roberts & Co.'s leveraged buyout proposal at a Feb. 18 shareholders meeting. The opposition to the acquisition basically said that the original offer undervalued the company.

Later that week, though, KKR announced that it increased its bid for Masonite to C$42.25 per share cash from C$40.20 per share cash, and, in light of the change, Masonite rescheduled its shareholders meeting to March 31 from Feb. 18.

"It's just like it was put on hold for two weeks and it's come back," the source said. "I think they're pretty confident they'll get shareholder approval. I would think they had significant conversations with shareholders when they were thinking of raising the price."

As before, Masonite is also expected to approach the high-yield market with $825 million of high-yield bonds as part of this transaction.

The additional funds needed by KKR to complete the LBO will come from equity, the source explained.

Masonite International is a Mississauga, Ont.-based building products company.

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