MITER in $3.1bn deal for PGT

April 2024 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

April 2024 Issue

Following its rejection of an offer from Masonite International, windows and doors manufacturer PGT Innovations Inc. has agreed to be acquired by rival window manufacturer MITER Brands in a transaction valued at approximately $3.1bn.

Under the terms of the definitive agreement, MITER will acquire all outstanding shares of PGT at $42 per share in cash. The transaction will be financed in part by an equity investment from KochEquity Development LLC – the principal investment and acquisition arm of Koch Industries, Inc., and a current investor in MITER.

MITER and PGT entered into their agreement after the PGT board unanimously determined that MITER’s proposal constituted a “superior proposal” than its merger agreement with Masonite. Thus, in accordance with the merger agreement, Masonite waived its right to improve the terms of its offer and a termination fee of $84m to Masonite was triggered.

“MITER and PGT are fully aligned in providing world-class service and the finest products with a culture where people, performance and customer experiences come first.” said Matt DeSoto, president and chief executive of MITER. “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 acquisition has been unanimously approved by the boards of directors of both MITER and PGT.

“We are thrilled to have reached an agreement with MITER that maximises value for PGT shareholders,” said Jeffrey T. Jackson, president and chief executive of PGT. “Since its founding over 40 years ago, PGT has delivered profitable growth and created significant shareholder value by serving its 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.”

Founded in 1947, MITER is a residential window and door manufacturer that produces a portfolio of window and door brands for the new construction and replacement segments with an owner-operated, family-first approach. Likewise, PGT manufactures and supplies premium windows, doors and garage doors that can withstand some of the toughest weather conditions and are revolutionising the way people live by unifying indoor and outdoor living spaces.

MITER’s acquisition of PGT is expected to close by mid-year 2024, subject to PGT shareholder approval, regulatory approval and customary closing conditions. 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 transaction, PGT will become a privately held subsidiary of MITER and its common stock will no longer be traded on the New York Stock Exchange.

Acting as financial advisers to MITER as well providing committed debt financing are KeyBanc Capital Markets Inc. and RBC Capital Markets. Stinson LLP is acting as its legal counsel. Acting as exclusive financial adviser to PGT is Evercore, with Davis Polk & Wardwell LLP acting as legal counsel. Rothschild & Co US Inc. is acting as financial adviser to Koch Equity Development LLC and Jones Day is acting as its legal counsel.

“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,” concluded Mr DeSoto. “We are excited to welcome the PGT team into our owner-operated business with family-first values.”

Fraser Tennant