Owens Corning and Masonite Announce Successful Results of Early Participation in and Amend the Terms of Exchange Offer and Consent Solicitation

Rhea-AI Summary

Owens Corning (NYSE: OC) and Masonite International announced the successful early participation results for their exchange offer and consent solicitation concerning Masonite’s 3.50% Senior Notes due 2030. As of May 14, 2024, 99.51% of these notes had been tendered.

The terms were amended to increase the consideration for holders tendering after the early deadline. The amended terms include a $2.50 cash payment and $1,000 in new OC notes for each $1,000 principal amount of existing notes tendered. Eligible holders who tender after the early deadline will receive $970 in new OC notes plus an early tender premium but no consent payment.

The amendments to the indenture governing the notes will be effective once the exchange and acquisition are complete. All terms and conditions remain subject to the consummation of Owens Corning's acquisition of Masonite.

Positive

• Successful early participation with 99.51% of notes tendered.
• Increased consideration for holders tendering after the early deadline.
• Amendments to the indenture will be effective upon exchange and acquisition completion.
• Eligible holders receive a combination of new OC notes and cash.

Negative

• Eligible holders tendering after the early deadline do not receive the consent payment.
• Exchange offer and consent solicitation are contingent on the acquisition completion.

Insights

Financial Analyst

The successful early participation results and amendment of the terms of the exchange offer and consent solicitation by Owens Corning and Masonite have significant implications for bondholders and shareholders. The high percentage of the Existing Masonite Notes tendered (99.51%) reflects strong participation and confidence in the new terms. This indicates that bondholders are willing to exchange their notes for new Owens Corning notes, suggesting positive expectations for the merged entity's financial health. The amended terms, including the increase in consideration for notes tendered after the Early Participation Deadline, provide additional incentives for bondholders to participate, potentially enhancing liquidity and financial stability.

However, the completion of the exchange offer and consent solicitation is contingent upon the consummation of the Arrangement. This introduces a level of uncertainty, as any delays or issues in the Arrangement's finalization could affect the settlement dates and associated payments. Investors should closely monitor the progression of the acquisition to assess the timing and likelihood of receiving the Total Consideration.

In the short term, this development is likely to have a positive impact on Masonite's stock due to the high tender rate and favorable amendment terms. In the long term, the success of the Arrangement and the synergies realized from the acquisition will determine the overall financial benefits for Owens Corning and its shareholders.

Legal Expert

The legal ramifications of the exchange offer and consent solicitation are crucial, especially considering the need for amendments to the Masonite Indenture. The receipt of requisite consents to adopt the Proposed Amendments is a pivotal step, allowing the execution of a supplemental indenture. This legal maneuver ensures the exchange offer's terms align with the new debt structure, enhancing legal clarity and reducing risks associated with potential bondholder disputes.

The conditions tied to the effectiveness of the amendments, such as the acceptance of tendered notes and the consummation of the Arrangement, are standard in such transactions but warrant close attention. The phrasing around the eligibility of holders and the necessity for them to be Qualified Institutional Buyers or non-U.S. persons also underscores regulatory compliance and risk management strategies by both companies. This complexity highlights the need for investors to understand the legal frameworks governing such financial transactions, particularly concerning their rights and obligations under the new terms.

This legal clarity and adherence to regulatory requirements are positive indicators, enhancing investor confidence and potentially stabilizing the market perception of both companies involved.

TOLEDO, Ohio & TAMPA, Fla.--(BUSINESS WIRE)-- Owens Corning (NYSE: OC), a leader in global building and construction materials, and Masonite International Corporation (“Masonite”) (NYSE: DOOR), a leading global provider of interior and exterior doors and door systems, today announced that, in connection with the previously announced exchange offer (the “Exchange Offer”) by Owens Corning and consent solicitation (the “Consent Solicitation”) by Masonite, the requisite consents to adopt the proposed amendments described in the Statement (as defined below) (the “Proposed Amendments”) to the indenture (the “Masonite Indenture”) governing Masonite’s 3.50% Senior Notes due 2030 (the “Existing Masonite Notes”) have been received as of 5:00 p.m., New York City time, on May 14, 2024 (the “Withdrawal Deadline”). As a result, Masonite, the guarantors party thereto and the trustee under the Masonite Indenture (the “Masonite Trustee”) will promptly execute a supplemental indenture to the Masonite Indenture containing the Proposed Amendments. As previously announced, Owens Corning, MT Acquisition Co ULC, a wholly owned subsidiary of Owens Corning (“Purchaser”), and Masonite have entered into an Arrangement Agreement, dated as of February 8, 2024 (as it may be amended, the “Arrangement Agreement”), providing for, among other things and subject to the terms and conditions of the Arrangement Agreement, the acquisition of all of Masonite’s issued and outstanding common shares by Purchaser (the “Arrangement”).

The supplemental indenture containing the Proposed Amendments will be effective upon execution but will not become operative unless and until (i) the Existing Masonite Notes that are validly tendered (and not validly withdrawn) have been accepted for exchange by Owens Corning in accordance with the terms of the Exchange Offer and Consent Solicitation, and (ii) the Arrangement has been consummated and all of the other conditions of the Consent Solicitation set forth in the offering memorandum and consent solicitation statement dated May 1, 2024 (the “Statement”) have been satisfied or waived by Owens Corning.

In addition, Owens Corning and Masonite today announced that they have amended the terms of the Exchange Offer and Consent Solicitation to increase the consideration due to Eligible Holders (as defined below) that validly tender their Existing Masonite Notes and validly deliver their related consents after the Early Participation Deadline and at or before the Expiration Time (each as defined below) and whose Existing Masonite Notes are accepted for exchange so that such Eligible Holders will be eligible to receive the Exchange Consideration and the Early Tender Premium (each as defined below). For the avoidance of doubt, such Eligible Holders that validly tender their Existing Masonite Notes and validly deliver their related consents after the Early Participation Deadline and at or before the Expiration Time and whose Existing Masonite Notes are accepted for exchange will not be eligible to receive the Consent Payment (as defined below). Owens Corning and Masonite reserve the right to terminate, withdraw, extend or further amend the Exchange Offer and Consent Solicitation as described in the Statement.

Owens Corning and Masonite are making the Exchange Offer and Consent Solicitation pursuant to the terms of and subject to the conditions set forth in the Statement, as amended by this news release. Except as set forth herein, all other terms and conditions of the Exchange Offer and Consent Solicitation described in the Statement remain unchanged.

Eligible Holders may not deliver consents to the Proposed Amendments in the Consent Solicitation without tendering Existing Masonite Notes in the Exchange Offer, and may not tender Existing Masonite Notes in the Exchange Offer without delivering consents to the Proposed Amendments in the Consent Solicitation. The consent results below are based on early tenders in the Exchange Offer, which tenders are deemed also to constitute the delivery of consents in the Consent Solicitation made by Masonite to adopt the Proposed Amendments.

As of 5:00 p.m., New York City time, on May 14, 2024 (the “Early Participation Deadline”), according to Global Bondholder Services Corporation, the Exchange Agent and Information Agent for the Exchange Offer and the Consent Solicitation, the principal amount of Existing Masonite Notes set forth in the table below had been validly tendered and not validly withdrawn (and consents thereby deemed validly given and not validly revoked) in the Exchange Offer and the Consent Solicitation.

Title of Series	CUSIP / ISIN Nos. of Existing Masonite Notes	Aggregate Principal Amount Outstanding	Existing Masonite Notes Tendered and Consents Delivered at Early Participation Deadline
			Principal Amount	Percentage
3.50% Senior Notes due 2030	144A CUSIP: 575385 AE9   144A ISIN: US575385AE91   Reg. S CUSIP: C5389U AM2   Reg. S ISIN: USC5389UAM20	$375,000,000	$373,155,000	99.51%

Eligible Holders that validly tendered (and did not validly withdraw) their Existing Masonite Notes and validly delivered (and did not validly revoke) related consents at or prior to 5:00 p.m., New York City time, on May 14, 2024 (the “Early Participation Deadline”), and Eligible Holders that validly tender their Existing Masonite Notes and validly deliver related consents at or prior to 5:00 p.m., New York City time, on May 30, 2024, unless such date is extended or the Exchange Offer and Consent Solicitation are earlier terminated (such date and time, as the same may be extended, the “Expiration Time”), and whose Existing Masonite Notes are accepted for exchange by Owens Corning will be entitled to receive the Total Consideration or Exchange Consideration, respectively, for their Existing Masonite Notes, subject to the terms and conditions contained in the Statement, as amended by this news release.

For each $1,000 principal amount of Existing Masonite Notes validly tendered at or before the Early Participation Deadline and not validly withdrawn, Eligible Holders of such Existing Masonite Notes accepted for exchange will be eligible to receive $1,000 principal amount of new 3.50% Senior Notes due 2030 of Owens Corning (the “New Owens Corning Notes”) and $2.50 in cash (the “Total Consideration”), which includes a payment in cash of $2.50 per $1,000 principal amount of Existing Masonite Notes accepted for exchange (the “Consent Payment”) and an early tender premium, payable in New Owens Corning Notes, equal to $30.00 per $1,000 principal amount of Existing Masonite Notes accepted for exchange (the “Early Tender Premium”). For each $1,000 principal amount of Existing Masonite Notes validly tendered after the Early Participation Deadline and at or before the Expiration Time, Eligible Holders of such Existing Masonite Notes accepted for exchange will be eligible to receive $970 principal amount of New Owens Corning Notes (the “Exchange Consideration”) plus the Early Tender Premium, but will not be eligible to receive the Consent Payment. The New Owens Corning Notes will accrue interest from (and including) February 15, 2024, the most recent interest payment date on which interest has been paid by Masonite on the Existing Masonite Notes accepted in the Exchange Offer and Consent Solicitation. Except as set forth above and for payments made on scheduled interest payment dates under the terms of the New Owens Corning Notes, no accrued but unpaid interest will be paid by Owens Corning with respect to Existing Masonite Notes tendered for exchange and not validly withdrawn. Scheduled interest payments on Existing Masonite Notes will continue to be made by Masonite in accordance with the terms of the Existing Masonite Notes, including while they are deposited with the Exchange Agent if any such scheduled interest payment date occurs while they are so deposited. An Eligible Holder will remain entitled to all interest accrued on the Existing Masonite Notes during the period such Existing Masonite Notes are deposited with the Exchange Agent; however, upon acceptance for exchange by Owens Corning of Existing Masonite Notes that have been tendered and not validly withdrawn pursuant to the Exchange Offer, Eligible Holders of such Existing Masonite Notes will be deemed to have waived the right to receive any payment from Masonite in respect of interest accrued from the date of the last interest payment date on which interest has been paid on such Existing Masonite Notes. No accrued and unpaid interest will be paid by Masonite with respect to Existing Masonite Notes tendered and accepted for exchange.

Because the Exchange Offer and Consent Solicitation are subject to the satisfaction of, among other conditions, the consummation of the Arrangement, Eligible Holders will not receive the Total Consideration (including the Consent Payment and the Early Tender Premium) or Exchange Consideration and Early Tender Premium, as applicable, unless the Arrangement is consummated. The Total Consideration and Exchange Consideration with respect to Existing Masonite Notes that have been validly tendered and not validly withdrawn on or before the Early Participation Deadline or Expiration Time, as applicable, and accepted for exchange will be paid by Owens Corning on the applicable Settlement Date (as defined below).

The “Early Settlement Date” will be, at Owens Corning’s option, any time after the Early Participation Deadline and prior to the Expiration Time, subject to the satisfaction or waiver of all conditions to consummation of the Exchange Offer and the Consent Solicitation, including the consummation of the Arrangement. The “Final Settlement Date” will be promptly after the Expiration Time (expected to be within two business days after the Expiration Time). We refer to the Early Settlement Date and the Final Settlement Date as the “Settlement Date,” as applicable. To the extent any Existing Masonite Notes are not tendered and accepted in the Exchange Offer and Consent Solicitation, Owens Corning or Masonite may purchase any outstanding Existing Masonite Notes in the open market, in privately negotiated transactions, through one or more additional tender or exchange offers, by redemption or otherwise.

Owens Corning has engaged Morgan Stanley & Co. LLC as Lead Dealer Manager and Solicitation Agent and Wells Fargo Securities, LLC as Co-Dealer Manager and Solicitation Agent for the Exchange Offer. Copies of the Statement may be obtained from Global Bondholder Services Corporation, the Exchange Agent and Information Agent, by phone at (855) 654-2015 (toll-free) or (212) 430-3774 (collect for banks and brokers) or by email at contact@gbsc-usa.com. Please direct questions regarding the Exchange Offer to Morgan Stanley & Co. LLC at (800) 624-1808 (toll-free) or (212) 761-1057 (collect for banks and brokers).

The Statement and other documents relating to the Exchange Offer and Consent Solicitation will only be distributed to Eligible Holders of Existing Masonite Notes who complete and return an eligibility form confirming that they are either (a) a “Qualified Institutional Buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Securities Act”), or (b) a person that is outside the “United States” and is (i) not a “U.S. person,” as those terms are defined in Rule 902 under the Securities Act and (ii) a “non-U.S. qualified offeree” (as defined in the Statement) (such holders, the “Eligible Holders”). Eligible Holders of Existing Masonite Notes who desire to obtain and complete an eligibility form should either visit the website for this purpose at https://gbsc-usa.com/eligibility/owenscorning or call Global Bondholder Services Corporation, the Exchange Agent and Information Agent for the Exchange Offer and Consent Solicitation, at (855) 654-2015 (toll-free) or (212) 430-3774 (collect for banks and brokers).

The New Owens Corning Notes have not been registered under the Securities Act or any state securities laws. Therefore, the New Owens Corning Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.

About Owens Corning

Owens Corning is a global building and construction materials leader committed to building a sustainable future through material innovation. Our three integrated businesses – Roofing, Insulation, and Composites – provide durable, sustainable, energy-efficient solutions that leverage our unique material science, manufacturing, and market knowledge to help our customers win and grow. We are global in scope, human in scale with approximately 18,000 employees in 30 countries dedicated to generating value for our customers and shareholders and making a difference in the communities where we work and live. Founded in 1938 and based in Toledo, Ohio, USA, Owens Corning posted 2023 sales of $9.7 billion.

About Masonite

Masonite 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 approximately 6,600 customers globally.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements present our current forecasts and estimates of future events. These statements do not strictly relate to historical or current results and can be identified by words such as “anticipate,” “appear,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “will,” “can,” “could,” “predict,” “future,” “potential,” “intend,” “forecast,” “look,” “build,” “focus,” “create,” “work,” “continue,” “target,” “poised,” “advance,” “drive,” “aim,” “approach,” “seek,” “schedule,” “position,” “pursue,” “progress,” “budget,” “outlook,” “trend,” “guidance,” “commit,” “on track,” “objective,” “goal,” “opportunity,” “ambitions,” “aspire” and variations of negatives of such terms or variations thereof. Other words and terms of similar meaning or import in connection with any discussion of future plans, actions, events or operating, financial or other performance identify forward-looking statements.

Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements regarding the transactions contemplated by the Arrangement Agreement, including the Arrangement (the “Transaction”), including the expected time period to consummate the Transaction, the anticipated benefits (including synergies) of the Transaction and integration and transition plans, opportunities, anticipated future performance, expected share buyback programs and expected dividends. All such forward-looking statements are based upon current plans, estimates, expectations and ambitions that are subject to risks, uncertainties, assumptions and other factors, many of which are beyond the control of Masonite and Owens Corning, that could cause actual results to differ materially from the results projected in such forward-looking statements. These risks, uncertainties, assumptions and other factors include, without limitation: the expected timing and structure of the Transaction; the ability of the parties to complete the Transaction; the expected benefits of the Transaction, such as improved operations, enhanced revenues and cash flow, synergies, growth potential, market profile, business plans, expanded portfolio and financial strength; the ability of Owens Corning to successfully integrate the operations of Masonite and to achieve expected synergies; cost reductions and/or productivity improvements, including the risk that problems may arise which may result in the combined company not operating as effectively and efficiently as expected; the occurrence of any event, change or other circumstances that could give rise to the termination of the Arrangement Agreement; the risk that the anticipated tax treatment of the Transaction is not obtained; the risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the Transaction; the risk that any announcements relating to the Transaction could have adverse effects on the market price of Masonite’s or Owens Corning’s common shares; the risk that the Transaction and its announcement could have an adverse effect on the parties’ business relationships and businesses generally, including the ability of Masonite and Owens Corning to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers, and on their operating results and businesses generally; unexpected future capital expenditures; potential litigation relating to the Transaction that could be instituted against Masonite and/or Owens Corning or their respective directors and/or officers; third party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the Transaction which are not waived or otherwise satisfactorily resolved; the competitive ability and position of Owens Corning following completion of the Transaction; legal, economic and regulatory conditions, and any assumptions underlying any of the foregoing; levels of residential and commercial or industrial construction activity; demand for Masonite and Owens Corning products; industry and economic conditions including, but not limited to, supply chain disruptions, recessionary conditions, inflationary pressures, interest rate and financial market volatility and the viability of banks and other financial institutions; availability and cost of energy and raw materials; levels of global industrial production; competitive and pricing factors; relationships with key customers and customer concentration in certain areas; issues related to acquisitions, divestitures and joint ventures or expansions; various events that could disrupt operations, including climate change, weather conditions and storm activity such as droughts, floods, avalanches and earthquakes, cybersecurity attacks, security threats and governmental response to them, and technological changes; legislation and related regulations or interpretations, in the United States or elsewhere; domestic and international economic and political conditions, policies or other governmental actions, as well as war and civil disturbance; changes to tariff, trade or investment policies or laws; uninsured losses, including those from natural disasters, catastrophes, pandemics, theft or sabotage; environmental, product-related or other legal and regulatory unforeseen or unknown liabilities, proceedings or actions; research and development activities and intellectual property protection; issues involving implementation and protection of information technology systems; foreign exchange and commodity price fluctuations; levels of indebtedness, liquidity and the availability and cost of credit; rating agency actions and Masonite’s and Owens Corning’s ability to access short- and long-term debt markets on a timely and affordable basis; the level of fixed costs required to run Masonite’s and Owens Corning’s businesses; levels of goodwill or other indefinite-lived intangible assets; labor disputes or shortages, changes in labor costs and labor difficulties; effects of industry, market, economic, legal or legislative, political or regulatory conditions outside of Masonite’s or Owens Corning’s control; and other factors detailed from time to time in Masonite’s and Owens Corning’s SEC filings.

All forward-looking statements in this communication should be considered in the context of the risks and other factors described above and in the specific factors discussed under the heading “Risk Factors” in both Masonite’s and Owens Corning’s most recent Annual Report on Form 10-K filed with the SEC, in each case as these risk factors are amended or supplemented by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Masonite’s reports that are filed with the SEC are available on Masonite’s website at https://investor.masonite.com/ and on the SEC’s website at http://www.sec.gov, and Owens Corning’s reports that are filed with the SEC are available on Owens Corning’s website at https://investor.owenscorning.com/investors and on the SEC website at http://www.sec.gov. Any forward-looking statements speak only as of the date the statement is made and neither Owens Corning nor Masonite undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. It is not possible to identify all of the risks, uncertainties and other factors that may affect future results. In light of these risks and uncertainties, the forward-looking events and circumstances discussed herein may not occur and actual results may differ materially from those anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements.

No Offer or Solicitation

This communication is not intended to and does not constitute an offer to purchase, or the solicitation of an offer to sell, or the solicitation of tenders or consents with respect to any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In the case of the Exchange Offer and Consent Solicitation, the Exchange Offer and Consent Solicitation are being made solely pursuant to the Statement and only to such persons and in such jurisdictions as is permitted under applicable law.

Owens Corning Company News / Owens Corning Investor Relations News

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514644283/en/

Owens Corning

Amber Wohlfarth

VP, Corporate Affairs & Investor Relations

amber.wohlfarth@owenscorning.com

419.248.5639

Megan James

Director, Media Relations

megan.james@owenscorning.com

419.348.0768

Masonite

Richard Leland

VP, Finance and Treasurer

rleland@masonite.com

813.739.1808

Marcus Devlin

Director, Investor Relations

mdevlin@masonite.com

813.371.5839

Tali Epstein/ Jim Golden/ Jude Gorman

Collected Strategies

Masonite-CS@collectedstrategies.com

Source: Owens Corning

FAQ

What was the participation rate for Masonite’s notes in the Owens Corning exchange offer as of May 14, 2024?

As of May 14, 2024, 99.51% of Masonite’s 3.50% Senior Notes due 2030 had been tendered.

What consideration will eligible holders receive if they tender after the early participation deadline but before the expiration time?

Eligible holders will receive $970 in new Owens Corning notes plus an early tender premium but will not receive the consent payment.

What is the impact of the amendments to the Masonite indenture?

The amendments will be effective upon the completion of the exchange and Owens Corning's acquisition of Masonite.

When is the expiration time for the Owens Corning exchange offer?

The expiration time for the exchange offer is 5:00 p.m., New York City time, on May 30, 2024, unless extended.

What are the key conditions for the completion of the exchange offer and consent solicitation?

The key conditions include the completion of Owens Corning's acquisition of Masonite.