Masonite International Corporation to be Acquired
by KKR
Toronto, Ontario, December 22, 2004
– Masonite International Corporation (TSX
and NYSE:MHM), a global building products company,
announced today that it has entered into a definitive
agreement to be acquired by an affiliate of
Kohlberg Kravis Roberts & Co. (KKR), a leading
private equity firm, in an all cash transaction
pursuant to which Masonite's shareholders will
receive C$40.20 per share. The total value of
the transaction is approximately C$3.1 billion.
Masonite's board formed a special committee
of independent directors to consider the transaction.
The committee's independent financial adviser,
Merrill Lynch, has provided an opinion to the
board of Masonite that the consideration offered
in the transaction is fair from a financial
point of view to Masonite's shareholders. The
transaction is to be carried out by way of a
statutory plan of arrangement. The Company anticipates
mailing a proxy circular relating to the transaction
in the third week of January to shareholders
of record on January 17, 2005 for a meeting
to be held on February 18, 2005. The transaction
will be subject to the approval of 66 2/3% of
the votes cast by Masonite shareholders at the
meeting and also a simple majority of the votes
cast by shareholders other than members of senior
management of Masonite.
Masonite's management team will remain in place
following the completion of the transaction.
At the time of completion, Masonite's management
will be required to invest in approximately
5% of the equity of Masonite at the same per
share price as KKR is paying for its equity
in the proposed transaction. Closing is subject
to customary conditions, including regulatory
and court approvals. The Bank of Nova Scotia
has committed to provide debt financing for
the transaction which, together with the equity
infusion from funds managed by KKR, will provide
sufficient financing to complete the transaction.
Scotia Capital acted as the financial advisor
to KKR.
Philip S. Orsino, President and CEO of Masonite
said: "Our entire management team will
continue to focus on providing superior service
and products to our customers worldwide."
Paul E. Raether, a member of KKR, said, "Masonite
is a well-managed, well positioned, innovative
company with a global customer base. We expect
Masonite to continue its expansion as a leading
manufacturer of door products and look forward
to working with management on the next stage
of the Company's development."
The combination agreement between Masonite
and KKR contains customary provisions prohibiting
Masonite from soliciting any other acquisition
proposal but allowing termination of the agreement
in certain events, including in the event of
an unsolicited acquisition proposal from a third
party that in the exercise of its fiduciary
duties the board of directors of Masonite finds
to be superior to the KKR transaction, upon
payment of a termination fee to KKR.
The proposed transaction, which has received
the unanimous approval of the board of directors
of Masonite, is expected to close in late February
2005. Masonite is a unique, integrated, global
building products company with its corporate
headquarters in Mississauga, Ontario and its
international administrative offices in Tampa,
Florida. It operates over 75 facilities in sixteen
countries in North America, South America, Europe,
Asia and Africa and has approximately 14,000
employees. The Company sells its products to
customers in over 50 countries. For more information,
visit www.masonite.com.
KKR is one of the world's oldest and most experienced
private equity firms specializing in management
buyouts, with offices in New York, Menlo Park,
California and London, England. Over the past
twenty-eight years, KKR has invested in more
than 115 transactions with a total value of
US$138 billion. For more information, visit
www.kkr.com.
Certain statements in this press release are
intended as "forward looking statements".
These statements include assumptions, expectations,
predictions, intentions or beliefs about future
events. Actual future results may vary materially
from those expected or implied in any forward
looking statements. Some of the key factors
that could cause actual results to vary from
those expressed or implied include the satisfaction
of conditions precedent to the transaction.
Contact:
For Masonite
John F. Ambruz
Executive Vice-President, Strategic Development
Masonite International Corporation
Telephone: (905) 670-6514
For KKR
Molly Morse/David Lilly
Kekst and Company
Telephone: (212) 521-4826/4878
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