Building materials giant to buy Tampa-based Masonite in $4B deal

Just weeks after Tampa-based Masonite International saw a $3 billion deal fall through in its pursuit of PGT Innovations of Venice, Masonite itself has agreed to be bought for $3.9 billion.

The news was announced in a Friday news release from Masonite and the company seeking to buy it, Toledo, Ohio-based Owens Corning. 

Owens Corning, a materials company with a market cap of $13 billion, says it reached an agreement with Masonite, a door systems manufacturer, to buy all outstanding shares of Masonite for $133 per share in cash.

That's a 38% premium to the closing price on Thursday, and an approximate 46% premium to Masonite's 20-day average price, the companies say in a the news release.

Following the closing, Masonite will operate as a segment, will maintain Masonite's brands and will stay in Tampa, the companies say.

The acquisition — and Masonite's missed attempt to acquire PGT Innovations — indicate the real estate market, renovation demand and new-home construction sectors remain hot.

And it also indicates companies in the home improvement and new-construction markets are eagerly looking for higher revenue through accretion: Owens Corning, with its 19,000 employees, says when Masonite is officially in its fold, "revenue generated from North American residential applications will grow to 60% of its total revenue."

And Owens Corning says overall annual revenue will jump to $12.6 billion.

Owen Corning's 2022 revenue was $9.8 billion, with a sales increase of 15% in 2022 from 2021. Owens Corning also reported record cash flow that year and net earnings of $1.2 billion, according to its investor filings. Owens Corning will release its full-year report for 2023 Feb. 14.

Masonite had 2022 revenue of $2.9 billion, up 11.35% from 2021.

The acquisition is a turn of events for Masonite. In mid-January, PGT Innovations, Sarasota County's largest publicly traded company and a designer and manufacturer of impact-resistant patio door and window systems, declined a Masonite offer and took an acquisition bid instead from Miter Brands of Pennsylvania.

On the regional list of Gulf Coast publicly traded companies, Masonite is ranked No. 8 in the Business Observer's 2023 Big Book of Business, while PGT Innovations is No. 16.

Miter had already been making unsolicited bids for PGT Innovations when Masonite made its $3 billion offer. After the deal fell through, Masonite walked away with an $84 million termination fee, and soon wound up itself eyed by a larger company.

The addition of Masonite's doors business "creates a new growth platform for Owens Corning, strengthening the company’s position in residential building materials and extending its offering of highly valued products and brands," the two companies say in a joint news release.

Owens Corning says it found value in Masonite's commercial capabilities and "proven go-to-market model" serving contractors, builders and distributors.

Founded in 1925, Masonite designs, manufactures and markets doors and door systems, for the markets of both repair and new construction. Masonite operates 64 manufacturing and distribution facilities, primarily in North America, and has over 10,000 employees globally, the two companies say.

"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," says Brian Chambers, Owens Corning CEO and board chairman.

Owens Corning says the acquisition of Masonite allows an entry into the doors markets and "adds a highly complementary line of innovative products and advances Owens Corning's strategy to expand its building materials offering in residential applications."

Owens Corning was founded in 1938. Owens Corning has three integrated businesses: roofing, insulation and composites. The company says it employs approximately 19,000 people in 31 countries.