FALSE000089369100008936912022-12-302022-12-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________________________________
FORM 8-K
________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 2022
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Masonite International Corporation
(Exact name of registrant as specified in its charter)
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British Columbia, Canada | | 001-11796 | | 98-0377314 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
2771 Rutherford Road
Concord, Ontario L4K 2N6 Canada
(Address of principal executive offices)
(800) 895-2723
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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| Securities registered pursuant to Section 12(b) of the Act: |
| Common Stock (no par value) | DOOR | New York Stock Exchange |
| (Title of class) | (Trading symbol) | (Name of exchange on which registered) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | | | | | |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | | | | | |
| ☐ | Emerging growth company |
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| ☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
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| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously disclosed, Masonite Corporation, a Delaware Corporation (“Buyer”), a wholly-owned subsidiary of Masonite International Corporation, a British Columbia corporation (“Masonite”), entered into a Securities Purchase Agreement (inclusive of the Amendment described below, the “SPA”) dated as of November 2, 2022, by and among Buyer, Cyprium Investors V LP, a Delaware limited partnership (“Cyprium Investors V”), Cyprium Parallel Investors V LP, a Delaware limited partnership (“Cyprium Parallel V”), 1492 Capital LLC, an Ohio limited liability company (“1492 Capital”), Nationwide Defined Benefit Master Trust, an employee pension plan organized in New York (“Nationwide”), Bruce Procton, a natural person, the Rose E. Procton Irrevocable Trust u/a/d 12/31/12, the Alexander M. Procton Irrevocable Trust u/a/d 12/31/12, the Jonas M. Procton Irrevocable Trust u/a/d 12/31/12, Kevin MacDonald, a natural person, Walter Hammond, a natural person, Greg McGehee, a natural person, and Larry Repar, a natural person (collectively, the “Endura Stockholders”), Cyprium Investors V, Cyprium Parallel V, 1492 Capital and Nationwide (collectively, the “Endura Warrant Holders” ), Endura and Bruce Procton, a natural person, as Endura’s equityholders’ representative, pursuant to which Buyer acquired all of the rights and interests in and to the capital stock of Endura, for a purchase price of approximately $375 million in cash, subject to certain adjustments as set forth in the SPA.
On December 30, 2022, Buyer, Endura Stockholders, Endura Warrant Holders, Endura and Bruce Procton entered into an amendment to the SPA (the “Amendment”), pursuant to which, among other things, the Initial Outside Date (as defined in the SPA) was amended to be January 4, 2023 to permit the transaction to be completed on January 3, 2023.
Other than as expressly modified pursuant to the Amendment, the SPA, which was previously filed as Exhibit 2.1 to Masonite’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 3, 2022 and is incorporated herein by reference, remains unmodified. The foregoing description of the Amendment does not purport to be complete, and is qualified in its entirety by reference to the full text of the Amendment, which is filed herewith as Exhibit 10.2 and is incorporated herein by reference.
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Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The disclosure under Item 1.01 of this report is incorporated by reference herein. On January 3, 2023, the transactions contemplated under the SPA were completed.
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Item 7.01 | Regulation FD Disclosure. |
On January 3, 2023, Masonite issued a press release announcing the completion of the transactions contemplated by the SPA. The press release is furnished as Exhibit 99.1 to this Form 8-K.
The information and exhibit provided pursuant to this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section 18, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such a filing.
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Item 9.01 | Financial Statements and Exhibits. |
(a) Financial statements of business acquired.
The financial statements required by this Item 9.01(a) are not included in this Current Report on Form 8-K. Masonite intends to file such financial statements by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(b) Pro forma financial information.
The pro forma financial information required by this Item 9.01(b) is not included in this Current Report on Form 8-K. Masonite intends to file such pro forma financial information by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
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| Exhibit No. | | Description | |
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| | Amendment to the Securities Purchase Agreement, dated as of December 30, 2022, by and among Buyer, Masonite, Endura, Endura Stockholders, Endura Warrant Holders and Endura’s equityholders’ representative |
| | Press release issued by Masonite International Corporation on January 3, 2023 |
| 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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| * Schedules and certain exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby agrees to supplementally furnish to the SEC upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| MASONITE INTERNATIONAL CORPORATION |
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| Date: | January 3, 2023 | By: | | /s/ James C. Pelletier |
| | Name: | | James C. Pelletier |
| | Title: | | Senior Vice President, General Counsel and Corporate Secretary |
AMENDMENT NO. 1 TO THE SECURITIES PURCHASE AGREEMENT
This Amendment No. 1, dated as of December 30, 2022 (this “Amendment”), to the Securities Purchase Agreement, dated as of November 2, 2022 (the “Agreement”), by and among Masonite Corporation, a Delaware corporation (“Buyer”), EPI Holdings, Inc., a Delaware corporation (the “Company”), Cyprium Investors V LP, a Delaware limited partnership (“Cyprium Investors V”), Cyprium Parallel Investors V LP, a Delaware limited partnership (“Cyprium Parallel V”), 1492 Capital LLC, an Ohio limited liability company (“1492 Capital”), Nationwide Defined Benefit Master Trust, an employee pension plan organized in New York (“Nationwide”), Bruce Procton, a natural person, the Rose E. Procton Irrevocable Trust u/a/d 12/31/12, the Alexander M. Procton Irrevocable Trust u/a/d 12/31/12, the Jonas M. Procton Irrevocable Trust u/a/d 12/31/12, Kevin MacDonald, a natural person, Walter Hammond, a natural person, Greg McGehee, a natural person, and Larry Repar, a natural person (collectively, the “Company Stockholders”), Cyprium Investors V, Cyprium Parallel V, 1492 Capital and Nationwide (collectively, the “Company Warrant Holders”), and Bruce E. Procton, a natural person (the “Company Equityholders’ Representative”), as the Company Equityholders’ Representative.
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Agreement; and
WHEREAS, in accordance with Section 11.1 of the Agreement, the parties hereto wish to amend the Agreement as set forth therein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein (the receipt and sufficiency of which is hereby acknowledged and agreed), the parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Amendment and not otherwise defined shall have the meanings ascribed to such terms in the Agreement.
2. Amendment to Section 1.4(a)(x). Section 1.4(a)(x) of the Agreement is hereby amended and restated in its entirety as follows with additions appearing in bold and underlined and deletions appearing as strikethroughs:
“Bruce E. Procton Capital Contribution. On or before the Closing Date, Bruce E. Procton shall make a capital contribution in cash to the Company in an amount sufficient to enable the Company or a Company Subsidiary to pay bonuses to employees of the Company or a Company Subsidiary in a total amount of (A) One Million Five Hundred Ninety-Seven Thousand Six Hundred dollars ($1,597,600) one million two hundred thousand dollars ($1,200,000), plus (B) the Company’s or Company Subsidiary’s portion of any payroll taxes owed by the
Company or any Company Subsidiary with respect to such bonuses (the “Capital Contribution”).”
3. Amendment to Section 2.2(b). Section 2.2(b) of the Agreement is hereby amended and restated in its entirety as follows with additions appearing in bold and underlined and deletions appearing as strikethroughs:
“Section 2.2(b) of the Company Disclosure Schedule contains an illustrative Allocation Schedule (the “Illustrative Allocation Schedule”) prepared by the Company as if the Closing occurred as of the date of this Agreement and, without limiting any other covenants, agreements, representations or warranties of the Company, the Company Stockholders, and the Company Warrant Holders under this Agreement or the rights or remedies of Buyer with respect thereto, the Allocation Schedule will be substantially in the form of the Illustrative Allocation Schedule and will take into account any changes to the Company’s capitalization between the date of this Agreement and the date of delivery of the Allocation Schedule to Buyer pursuant to Section 2.2(a). The Company will review any comments to the Allocation Schedule provided by Buyer or any of its Representatives and consider in good faith and incorporate any reasonable comments proposed by Buyer or any of its Representatives. Notwithstanding the foregoing or anything to the contrary herein, the information required to be provided under Section 2.2(a)(vii) shall be provided only on the date of delivery of the Allocation Schedule.in the Illustrative Allocation Schedule under Section 2.2(a)(vii), (i) other than the allocation contemplated by clause (ii) hereof, shall be provided by the Company within five (5) Business Days as of the date of this Agreement and (ii) with respect to the allocation among recipients of a portion of the Change of Control Payments in an approximate aggregate amount of one million, two hundred thirty-three thousand, three hundred forty-seven ($1,233,347) shall be provided by the Company within thirty (30) calendar days of the date of this Agreement”
4. Amendment to Section 3.2(a). Section 3.2(a) of the Company Disclosure Schedule is hereby amended as set forth on Annex A hereto.
5. Amendment to Section 3.2(h). Section 3.2(h) of the Company Disclosure Schedule is hereby amended and restated in its entirety as set forth on Annex A hereto.
6. Amendment to Section 3.13(a). Section 3.13(a) of the Company Disclosure Schedule is hereby amended as set forth on Annex A hereto.
7. Amendment to Section 6.2. Sections 6.2(e), 6.2(f) and 6.2(r) of the Company Disclosure Schedule are hereby amended to include the disclosure set forth on Annex B hereto.
8. Amendment to Section 9.1(a)(iv). Section 9.1(a)(iv) of the Agreement is hereby amended by replacing reference to “December 31, 2022” with “January 4, 2023”.
9. Agreement Remains in Effect. Except as expressly amended by this Amendment, the Agreement remains in full force and effect and nothing in this Amendment shall otherwise affect any other provision of the Agreement or the rights and obligations of the parties hereto.
10. References to the Agreement. After giving effect to this Amendment, each reference in the Agreement to “this Agreement,” “hereof,” “hereunder” or words of like import referring to the Agreement shall refer to the Agreement as amended by this Amendment.
11. Incorporation by Reference. Sections 11.1 (Amendment); 11.3 (Notices); 11.4 (Interpretation); 11.2 (Headings; Definitions); 11.5 (Waiver of Jury Trial); 11.6 (Counterparts; Electronic Signatures); 11.7 (Entire Agreement); 11.8 (Governing Law; Jurisdiction); 11.9 (Assignment); 11.10 (Third Party Beneficiaries); 11.11 (Specific Performance) and 11.12 (Severability) of the Agreement are incorporated herein by reference, mutatis mutandis.
[Signature Page Follows]
IN WITNESS WHEREOF, this Amendment No. 1 to the Securities Purchase Agreement has been executed on behalf of each of the parties hereto as of the date first above written.
MASONITE CORPORATION
By: /s/ Howard C. Heckes
Name: Howard C. Heckes
Title: President and Chief Executive Officer
IN WITNESS WHEREOF, this Amendment No. 1 to the Securities Purchase Agreement has been executed on behalf of each of the parties hereto as of the date first above written.
COMPANY
By: /s/ Bruce E. Procton
Name: Bruce E. Procton
Title: President
COMPANY EQUITYHOLDERS’ REPRESENTATIVE
/s/ Bruce E. Procton
Bruce E. Procton
PRESS RELEASE
_____________________________________________________________________________
Masonite International Corporation Completes Acquisition of Endura Products
Acquisition to accelerate the Masonite Doors That Do MoreTM strategy by unlocking the value of fully integrated door solutions
Tampa, FL, January 3, 2023 — Masonite International Corporation ("Masonite" or "the Company) (NYSE: DOOR) today announced the completion of its acquisition of Endura Products ("Endura").
“We are excited to complete the acquisition of Endura and add their high-performance door frames and door system components to our product portfolio,” said Howard Heckes, President and CEO, Masonite. “The combination of our two companies is a natural fit, and we are eager to leverage the combined organization to develop innovative new door solutions that accelerate our Doors That Do MoreTM strategy and maximize our growth potential. We are thrilled to welcome the Endura team to the Masonite family.”
The acquisition purchase price was funded using proceeds from the Company's recently announced $250 million senior secured term loan as well as a combination of borrowings on its asset-based revolving credit facility and cash on hand.
Wachtell, Lipton, Rosen & Katz is serving as legal counsel for Masonite in connection with the transaction and Simpson Thacher & Bartlett LLP is serving as financing counsel for Masonite.
About Masonite
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. Since 1925, Masonite has provided its customers with innovative products and superior service at compelling values. Masonite currently serves more than 7,000 customers globally. Additional information about Masonite can be found at www.masonite.com.
Forward-looking Statements
This press release contains "forward-looking statements" within the meaning of the federal securities laws, including our discussion of the completed acquisition of Endura, including our ability to successfully integrate Endura’s business and achieve the expected synergies, and statements relating to our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and product development efforts and ability to achieve the revenues, cost savings, synergies and other anticipated benefits associated with the transaction. When used in this press release, such forward-looking statements may be identified by the use of such words as “may,” “might,” “could,” “will,” “would,” “should,” “expect,” “believes,” “outlook,” “predict,” “forecast,” “objective,” “remain,” “anticipate,” “estimate,” “potential,” “continue,” “plan,” “project,” “targeting,” or the negative of these terms or other similar terminology.
Forward-looking statements involve significant known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Masonite, or industry results, to be materially different from any future plans, goals, targets, objectives,
results, performance or achievements expressed or implied by such forward-looking statements. As a result, such forward-looking statements should not be read as guarantees of future performance or results, should not be unduly relied upon, and will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking statements include, but are not limited to, downward trends in our end markets and in economic conditions; reduced levels of residential new construction; residential repair, renovation and remodeling; and non-residential building construction activity due to increases in mortgage rates, changes in mortgage interest deductions and related tax changes and reduced availability of financing; competition; the continued success of, and our ability to maintain relationships with, certain key customers in light of customer concentration and consolidation; our ability to accurately anticipate demand for our products; impacts on our business including seasonality, weather and climate change; scale and scope of the ongoing coronavirus ("COVID-19") pandemic and its impact on our operations, customer demand and supply chain; inflation, including increases in prices of raw materials and fuel; tariffs and evolving trade policy and friction between the United States and other countries, including China, and the impact of anti-dumping and countervailing duties; increases in labor costs, the availability of labor, or labor relations (i.e., disruptions, strikes or work stoppages); our ability to manage our operations including potential disruptions, manufacturing realignments (including related restructuring charges) and customer credit risk; product liability claims and product recalls; our ability to generate sufficient cash flows to fund our capital expenditure requirements, to meet our pension obligations and to meet our debt service obligations, including our obligations under our senior notes and our asset-based revolving credit facility ("ABL Facility"); limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes and ABL Facility; fluctuating foreign exchange and interest rates; our ability to replace our expiring patents and to innovate, keep pace with technological developments and successfully consummate and integrate acquisitions; the continuous operation of our information technology and enterprise resource planning systems and management of potential cyber security threats and attacks; political, economic and other risks that arise from operating a multinational business; uncertainty relating to the United Kingdom's exit from the European Union; retention of key management personnel; and environmental and other government regulations, including the United States Foreign Corrupt Practices Act ("FCPA"), and any changes in such regulations. For a more detailed discussion of these factors, see the information under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Forward Looking Statements” in our most recent annual report on Form 10-K filed with the SEC on February 24, 2022, in each case as updated by our subsequent filings with the SEC. Masonite undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Richard Leland
VP, FINANCE AND TREASURER
rleland@masonite.com
813.739.1808
Marcus Devlin
DIRECTOR, INVESTOR RELATIONS
mdevlin@masonite.com
813.371.5839
