What does Owens Corning get from Masonite acquisition?

Owens Corning just committed to spend $3.9 billion to acquire Masonite International Corporation. But what did they get for their money? 

Here's a look at some of the details of this mega-deal.

The $3.9 billion cash deal will combine a 99-year-old door maker with a construction-materials company with roots back to the 1800s.

In the FDMC 300 list of top North American wood product manufacturers, the company ranks #8.

Since the announcement, shares of Masonite International Corp. rocketed toward their best day in 15 years Friday, after the doors maker agreed to be acquired.

NASDAQ.com, in its analysis of the deal, said:" Masonite's doors business, known for its innovation and quality, aligns seamlessly with OC's existing product portfolio. With Masonite's market-leading position and OC's commercial prowess, the synergy is expected to drive growth in the doors market. Leveraging OC's go-to-market model, the combined entity aims to capitalize on opportunities in residential construction."

Masonite International Corp.
In a Snapshot

Masonite International Corporation is a leading global designer, manufacturer, marketer, and distributor of interior and exterior doors and door systems for the new construction and repair, renovation, and remodeling sectors of the residential and non-residential building construction markets. Masonite currently serves approximately 7,000 customers globally.

Divisions: North American Residential; Europe; Architectural
Annual Sales: $2.9 billion ($2.4 billion North American residential & architectural)
Manufacturing Plants: 59: Haleyville, AL; Largo, FL; Mason City, IA; Shelbyville, KY; Laurel, MS; Verdi, NV; Charlotte, Greensboro, NC; Northumberland, PA; Denmark, SC; Stanley, VA; Marshfield, WI; Canada, Mexico, Chile. 4 Endura: Pineville, OR; Nacogdoches, TX; Stokesdale, NC
Total Square Footage: 12.4 million
Products: Interior and exterior doors and door systems for the new construction and repair, renovation, and remodeling sectors of the residential and non-residential building construction markets
Total Employees: 11,000

Most recent sales:

The company's fourth quarter and full year 2023 financial results are scheduled for Monday, February 19, 2024.

Prior to that, in November 2023, consolidated net sales were $702 million in the third quarter of 2023, a 4% decrease resulting from a 13% decline in volume partially offset by an 8% increase from the Endura acquisition and a 1% increase in average unit price (AUP). (In November 2022, a wholly owned subsidiary of Masonite entered into a definitive agreement to acquire the holding company of Endura Products for approximately $375 million in cash.) 
• North American Residential net sales were $553 million, a 5% decrease driven by a 14% decline in volume and a 1% decrease in AUP, partially offset by a 10% increase from the Endura acquisition.
• Europe net sales were $65 million, a 2% decrease driven by a 7% decline in volume and a 2% decrease from lower AUP, partially offset by a 7% increase from favorable foreign exchange.
• Architectural net sales were $81 million, a 4% increase driven by an 18% increase in AUP, partially offset by a 10% decline in volume and a 4% decrease from lower component sales. 

Strategic and financial benefits

Strengthened position: The acquisition will strengthen Owens Corning's position in residential building materials. The acquisition of Masonite and entry into doors adds a highly complementary line of innovative products and advances.
New growth platform: The deal will create a new growth platform by combining the two brands' capabilities.
Expanded market: The deal will expand Owens Corning's addressable market.
Increased revenue: The deal will increase Owens Corning's revenue to approximately $12.6 billion.
Increased workforce: The deal will increase Owens Corning's workforce to nearly 30,000 employees.
New brands: The deal will extend Owens Corning's range of products and brands. The acquisition also increases Owens Corning’s total addressable market by $27 billion and creates a platform to drive new growth opportunities in other product adjacencies. 
New doors business: The acquisition will add Masonite's market-leading doors business.
Improved financial profile: The deal will enhance Owens Corning's financial profile with increased revenue, earnings, and cost synergies. Owens Corning expects cost synergies of approximately $125 million annually, generated through scale and operational savings, with the majority realized by the end of Year 2 post-close.

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About the author
Larry Adams | Editor

Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).