EAGAN, MN and DEERFIELD, IL - The nation's largest cabinet conglomerate will be even bigger with the announcement that MasterBrand Cabinets' owner Fortune Brands Home & Security Inc. will acquire Norcraft Companies.
Under the terms of the agreement, Fortune Brands will purchase outstanding shares of Norcraft for $25.50 per share, for an approximate value of $600 million. Fortune Brands (NYSE: FBHS), is the parent firm of MasterBrand Cabinets Inc., which includes the Aristrokraft Cabinetry, Schrock Cabinetry, Diamond, Decora, Homecrest, Omega, Dynasty, Kemper and Wood Crafters brands.
Norcraft produces a range of kitchen and bath cabinetry through seven main brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry, Brookwood and Urban Effects.
Fortune Brands said the transaction will be financed under its existing credit facility and should be finalized in the second quarter. Norcraft (NYSE:NCFT), which posted 2014 sales of $376 million, will be merged into Fortune Brands' cabinet business.
"The combination of the two best cabinet businesses in North America is exciting," said Chris Klein, CEO of Fortune Brands. "Norcraft has proven capabilities and great relationships in the dealer channel with strong operating management throughout their business. The combination will strengthen our overall product offering, round out our regional market penetration and enhance our frameless capabilities. We see many opportunities for enhanced growth by bringing these businesses together."
Norcraft Chairman and CEO Mark Buller said, "Building on our successful accomplishments in 2014, we are also pleased to have reached this agreement with Fortune Brands. We believe our combined business will be better positioned to deepen our presence in new and existing markets while also enhancing our product offerings, customer relationships and operating platform. With our mutual focus on product innovation, dedicated service to customers and operational excellence, we believe this transaction provides an opportunity to benefit all of our stakeholders."
Completion of the transaction is subject to customary closing conditions. Under the terms of the agreement, Norcraft may solicit alternative acquisition proposals from third parties during a 35-day "go-shop" period, following the date of execution of the merger agreement.
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