Private equity firm Clayton, Dubilier & Rice (CD&R) will acquire exterior building product manufacturer Cornerstone Building Brands, Inc. (NYSE: CNR) in a deal, announced March 7, that will take the company private.
CD&R, which currently owns approximately 49% of Cornerstone’s common stock has offered Cornerstone’s shareholders $24.65 cash per share. This represents a 16% premium to Cornerstone’s closed share prices on March 4. In sum, the transaction is valued at $5.8 billion, including the assumption of debt.
“We believe this transaction provides substantial value for our shareholders while also accelerating Cornerstone Building Brands aspiration to become a premier exterior building solutions company,” Rose Lee, President and Chief Executive Officer of Cornerstone Building Brands, said in a press release. “We have grown our business and portfolio since 2018 when the Company was created, delivering high-quality exterior building products with a strong focus on being a partner of choice for our customers. CD&R will continue to be an outstanding partner as we advance our operational improvements and innovation-driven growth to create many positive outcomes for our customers and employees.”
Some of Cornerstone’s products include vinyl windows, vinyl siding, stone veneer, metal roofing, metal wall systems and metal accessories.
“As a supportive long-term investor over a number of years, we have seen firsthand the significant value that Cornerstone Building Brands brings to its customers and communities across North America,” J.L. Zrebiec, Partner at CD&R, said in a statement. “We are confident that as a privately held company, with CD&Rs operational and strategic support, Cornerstone Building Brands will be even better positioned in its next phase of growth.”
The deal is expected to close in Q2 or Q3 2022, subject to customary closing conditions. The proposed transaction has already been approved by Cornerstone’s board of directors.
Cornerstone Building Brands is represented by Sullivan & Cromwell LLP. The special committee for Cornerstone’s board of directors had Centerview Partners LLC as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel.
Clayton, Dubilier & Rice’s financial advisors are UBS Investment Bank, Barclays, BNP Paribas Securities Corp., Goldman Sachs, Jefferies, Natixis, New York Branch, RBC Capital Markets, and Societe Generale and Kirkland & Ellis LLP is serving as legal counsel on the transaction and Debevoise & Plimpton LLP is serving as legal counsel on the financing. CD&R has obtained committed financing from Deutsche Bank Securities Inc., UBS Investment Bank, Barclays, BNP Paribas, RBC Capital Markets, Societe Generale, Goldman Sachs, Natixis, New York Branch, Jefferies, Apollo, Blackstone Credit, and U.S. Bank.
Prior to the announcement, on March 4, Cornerstone’s shares were valued at $21.31. When it was announced on March 7, shares were valued at $24.10 and a week later on March 14, shares closed at $24.25.
Cornerstone previously acquired Cascade Windows for $245 million in 2021 and in 2021 it also sold its insulated metal panels business to Nucor for $1 billion. Meanwhile, CD&R has managed investments of more than $40 billion in more than 100 companies, with an aggregrate transaction value of $175 billion. These companies include American Greetings, David’s Bridal, Smile Direct Club, Motor Fuel Group, Beacon Building Products and TruGreen, among others.
