MITER Brands (a nationwide manufacturer of precision-built windows and doors) and PGT Innovations (a manufacturer of premium windows and doors) recently announced they have entered into a definitive merger agreement for MITER to acquire all outstanding shares of PGTI for $42 per share in cash, or an enterprise value of approximately $3.1 billion.
This purchase price represents a premium of 60% over PGTI’s unaffected closing share price on October 9, 2023, the last trading day before the public disclosure of a proposal for the acquisition of PGTI. And the board of directors of both companies has unanimously approved the merger agreement. The deal will be financed partly by an equity investment from Koch Equity Development LLC, the principal investment and acquisition arm of Koch Industries and a current investor in MITER.
PGTI also announced that it terminated its merger agreement with Masonite International on December 17, 2023.
MITER and PGTI entered into their agreement after the PGTI Board unanimously determined that MITER’s proposal constituted a “Superior Proposal” as defined in PGTI’s merger agreement with Masonite (dated December 17, 2023). And PGTI notified Masonite of its determination and Masonite waived its right to improve the terms of its offer. In accordance with PGTI’s merger agreement with Masonite, concurrent with the signing of PGTI’s definitive merger agreement with MITER, PGTI terminated its merger agreement with Masonite, and MITER, on behalf of PGTI, paid the termination fee of $84 million due to Masonite.
MITER’s deal with PGTI is expected to close by mid-year 2024, subject to PGTI shareholder approval, regulatory approval, and customary closing conditions. And MITER has obtained commitment letters for the financing necessary to complete the transaction, which is not subject to a financing condition. Upon completion of the deal, PGTI will become a privately held subsidiary of MITER, and its common stock will no longer be traded on the NYSE.
KeyBanc Capital Markets and RBC Capital Markets are acting as financial advisors to MITER Brands and are providing committed debt financing, and Stinson LLP is acting as its legal counsel. Evercore is acting as the exclusive financial advisor to PGTI, and Davis Polk & Wardwell LLP is acting as legal counsel to PGTI. Rothschild & Co. US is acting as financial advisor to Koch Equity Development LLC, and Jones Day is acting as its legal counsel.
KEY QUOTES:
“MITER and PGTI are fully aligned in providing world-class service and the finest products with a culture where people, performance, and customer experiences come first. 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. We are excited to welcome the PGTI team into our owner-operated business with family-first values.”
— Matt DeSoto, President and CEO of MITER Brands
“We are thrilled to have reached an agreement with MITER that maximizes value for PGTI shareholders. Since PGTI’s 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. We are excited to join forces with the MITER team.”
— Jeffrey T. Jackson, PGTI President and Chief Executive Officer
“Koch Equity Development is excited to support the DeSoto family along with the entire MITER Brands team in building the most valued window and door brand in America with our third equity investment since 2019. We are confident that MITER’s acquisition of PGTI will result in long-term value creation for all of MITER’s stakeholders and constituencies.”
— Richard Hunt, Managing Director at Koch Equity Development
