Masonite terminates $3B acquisition deal with PGT Innovations

A $3 billion acquisition deal between two publicly traded companies along the Gulf Coast has been terminated.

Masonite International, a Tampa manufacturer and distributor of interior and exterior doors and door systems, says it has abandoned its $3 billion deal to acquire PGT Innovations of Venice.

Masonite says it will receive a termination fee of $84 million from PGT Innovations.

PGT Innovations, Sarasota County's largest publicly traded company, is a designer and manufacturer of impact-resistant patio door and window systems.

Masonite disclosed the deal termination in a Wednesday morning news release, ending a pursuit that began in mid-December when the two companies announced the deal. That now-scuttled deal had Masonite paying a combination of cash and Masonite shares for PGT Innovations.

The offer came to $41 a share, split $33.50 in cash and $7.50 of its common stock.

But lurking in the background was another company, Miter Brands of Pennsylvania, which had already been making unsolicited bids for PGT Innovations. On Jan. 3, Miter, a national window and door manufacturer, made a third bid to acquire PGT Innovations, offering $41.50 a share.

That led Masonite to declare on Jan. 8 that it was still fully committed to its offer.

But on Friday, Miter made what PGT Innovations called "a superior proposal" to acquire the Venice company. The Masonite board of directors decided not to submit a revised offer to acquire PGT Innovations, according to Masonite officials.

A potential Masonite-PGT Innovations deal would have been one of the largest in the region's recent history. It would have created a window-and-door giant at a time when home construction is behind national demand. And the combined company would have exceeded $4 billion in annual revenue.

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.

Masonite had 2022 revenue of $2.9 billion, up 11.35% from 2021. PGT had revenue of $1.49 billion in 2022, up 28.5% from 2021.

Yet despite the proximity of the two door-and-window companies to each other, Masonite's CEO hinted that matching the offer from Miter was not in Masonite's best financial interest.

"The decision to waive our right to increase our offer reflects our commitment to financial discipline and rigor in our strategic investments," says Howard Heckes, president and CEO of Masonite, in Masonite's release.