PGTI Announces Private Placement of Additional Senior Notes

Rhea-AI Summary

PGT Innovations (NYSE: PGTI) plans to offer an additional $60 million in senior notes due 2026, exempt from Securities Act registration, to finance the cash portion of its acquisition of 75% equity in New Eco Windows Holding, LLC. This follows a previous announcement regarding the ECO Acquisition, expected to close in Q1 2021. If it does not close, PGTI will use proceeds to repay its existing term loan. The new notes will form a single series with existing notes, ensuring equal ranking. The offering targets qualified institutional buyers and non-U.S. persons.

Positive

• Company raises $60 million through additional senior notes to fund strategic acquisition.
• Acquisition of New Eco Windows is expected to enhance product offerings and market share.

Negative

• Acquisition is contingent on market conditions and may not close, impacting financial strategy.
• Integration risks associated with the acquisition might divert management attention and resources.

PGT Innovations, Inc. (NYSE: PGTI) (“PGTI” or the “Company”), a national leader in premium windows and doors, including impact-resistant products and products designed to unify indoor/outdoor living spaces, announced today that it intends to offer $60 million aggregate principal amount of additional senior notes due 2026 (the “Additional Notes”), subject to market conditions, in an offering that will be exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”). The Additional Notes will be part of the same issuance of, and will rank equally and form a single series with, the $365.0 million aggregate principal amount of PGTI’s 6.75% senior notes due 2026, $315 million aggregate principal amount of which were issued on August 10, 2018 and $50 million aggregate principal amount of which were issued on January 24, 2020 (the “Existing Notes” and, together with the Additional Notes, the “Notes”). The Additional Notes will have the same terms as the Existing Notes (except with respect to issue date and the date from which interest accrues).

The Additional Notes are being offered to finance, together with cash on hand, the cash portion of the purchase price of the acquisition (the “ECO Acquisition”) by the Company of 75% of the outstanding equity interests of New Eco Windows Holding, LLC (“New Holding”), a newly formed Delaware limited liability company formed for the purposes of facilitating the ECO Acquisition, which will hold 100% of the equity interests of ECO Window Systems, LLC, ECO Glass Production Inc. and Unity Windows Inc. (collectively, “ECO”). The ECO Acquisition was previously announced on January 7, 2021 and is expected to close in the first quarter of 2021. If the ECO Acquisition does not close, PGTI intends to apply proceeds of the Additional Notes to repay amounts outstanding under its existing term loan credit facility and for general corporate purposes, including future acquisitions.

The Additional Notes will be guaranteed, jointly and severally, by each existing and future domestic restricted subsidiary of the Company, other than any restricted subsidiary of the Company that does not guarantee the Company’s existing senior secured credit facilities or any permitted refinancing thereof (the “Guarantors”). In this regard, upon the consummation of the ECO Acquisition, New Holding and its subsidiaries will be designated as unrestricted subsidiaries under the indenture and the credit agreement governing the Company’s existing senior secured credit facilities and will not become Guarantors of the Notes or be guarantors of the Company’s existing senior secured credit facilities.

The Additional Notes and related guarantees will be offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act, and to non-U.S. persons in transactions outside the United States under Regulation S of the Securities Act. The Additional Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Additional Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This notice is being issued pursuant to and in accordance with Rule 135c under the Act.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are statements other than historical fact, and include statements relating to the offering of Additional Notes, including the use of proceeds therefrom. These “forward-looking statements” involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward- looking terminology, such as “may,” “expect,” “expectations,” “outlook,” “forecast,” “guidance,” “intend,” “believe,” “could,” “project,” “estimate,” “anticipate,” “should” and similar terminology. These risks and uncertainties include factors such as:

• market conditions and our ability to consummate the expected offering of the Additional Notes on the terms or timeline currently contemplated, or at all;
• the impact of the COVID-19 pandemic and related measures taken by governmental or regulatory authorities to combat the pandemic, including the impact of the pandemic and these measures on the economies and demand for our products in the states where we sell them, and on our customers, suppliers, labor force, business, operations and financial performance;
• the ability to successfully integrate the operations of ECO or to complete the integration of NewSouth Window Solutions (“NewSouth”) into our existing operations and the diversion of management’s attention from ongoing business and regular business responsibilities to effect such integration;
• disruption from our recent or future acquisitions or increased expenses or unanticipated liabilities making it more difficult to maintain relationships with customers or suppliers of acquired businesses;
• adverse changes in new home starts and home repair and remodeling trends, especially in the state of Florida and the western United States, where the substantial portion of our sales are currently generated, and in the U.S. gene

FAQ

What is PGT Innovations planning to do with the $60 million from the additional notes?

PGT Innovations intends to use the $60 million to finance the cash portion of its acquisition of New Eco Windows Holding.

What are the terms of the additional senior notes offered by PGT Innovations?

The additional senior notes will have the same terms as the existing 6.75% notes due 2026 but will differ in issue date and interest accrual start date.

What is the ECO Acquisition mentioned in PGT Innovations' press release?

The ECO Acquisition involves PGT Innovations acquiring 75% of New Eco Windows Holding, which owns ECO Window Systems and related entities.

Who can purchase the additional senior notes offered by PGT Innovations?

The additional notes are offered only to qualified institutional buyers and non-U.S. persons.

What will happen if the ECO Acquisition does not close?

If the ECO Acquisition does not close, PGTI will use the proceeds from the additional notes to repay outstanding term loans and for general corporate purposes.