Cornerstone Building Brands Announces Sale of $ 1 Billion Insulating Metal Panel Business, Accelerates Long-Term Value Creation
Unlocks immediate shareholder value and positions for sustainable growth
Anticipates reduction in net debt by around three quarters of a turn
Strengthens financial flexibility to fuel accretive growth opportunities
Optimizes its long-term value proposition by strengthening its position as a player of scale in large and deep markets
Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior construction products in North America, today announced that it has entered into a definitive agreement to sell its insulated metal panels (“IMP”) business to Nucor Insulated Panel Group Inc and certain of its subsidiaries (collectively, “Nucor”) in a $ 1 billion cash transaction. The transaction includes products sold under the Metl-Span and CENTRIA brands and is expected to close in the second half of 2021, subject to regulatory approval and other customary closing conditions.
“We believe this transaction creates immediate and substantial value for our shareholders and demonstrates the immense value that exists within the Cornerstone Building Brands portfolio,” said James S. Metcalf, Chairman and CEO. “We have made our IMP business a market leader with solid assets. The IMP business is strategically better suited to Nucor, which is well positioned to push the business even further. We will continue to focus on our investments in our core growth markets. and generate value through our main sales channels. “
IMP is a leading manufacturer of insulated metal panels in North America, a lightweight cladding solution serving all sub-sectors of the non-residential end-market. Under the terms of the agreement, the Company will sell seven manufacturing facilities, three offices and a product innovation center, all located in North America. Approximately 830 employees will be transferred from Cornerstone Building Brands to Nucor. These facilities and their employees will continue to operate normally until closure. Additionally, in conjunction with the sale, Nucor and Cornerstone Building Brands will enter into a long-term supply agreement. This agreement will allow the Company to continue to offer attractive IMP products as part of its steel construction products and components offering.
“With the proceeds from the sale, we will improve our leverage position by three quarters of a turn and strengthen our financial flexibility to fuel accretive growth opportunities,” said Jeffrey S. Lee, executive vice president and chief financial officer. “We remain disciplined in our deployment of capital and our progress towards our debt reduction targets. At the end of the first quarter of 2021, our net debt leverage would have been 3.9x, on a pro forma basis for this transaction.
The IMP business contributed approximately $ 335 million to the Company’s net sales for the twelve months ended April 3, 2021, presented through its business segment. The Company expects the after-tax transaction proceeds of approximately $ 750 million to be used to repay a portion of its secured credit facilities, invest in organic growth and efficiency projects and strategic acquisitions. .
Rothschild & Co acted as exclusive financial advisor and Debevoise & Plimpton LLP as legal advisor to Cornerstone Building Brands for this transaction.
About Cornerstone Building Brands
Cornerstone Building Brands is the largest manufacturer of exterior building products for residential and non-residential low-rise buildings in North America. Based in Cary, North Carolina, we serve residential and commercial customers in the new construction, repair and remodeling markets. Our market leading product portfolio includes vinyl windows, vinyl siding, stone veneers, insulated metal panels, metal roofing, metal wall systems and metal accessories. Cornerstone Building Brands’ large, multi-channel distribution platform and broad national footprint includes more than 20,000 employees in manufacturing, distribution and office sites across North America. Corporate stewardship and environmental, social and governance (ESG) responsibility are deeply rooted in our culture, and we are committed to making a positive contribution to the communities where we live, work and play. For more information, visit us at www.cornerstonebuildingbrands.com.
Certain statements and information contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate”, “direction”, “plan”, “expect, “should”, “will”, “expect”, “target” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect our expectations, current assumptions and / or beliefs about future events. Accordingly, these forward-looking statements are based on a number of assumptions, forecasts and estimates and, accordingly, these forward-looking statements are subject to a number of risks and uncertainties which may cause actual performance to perform. of the Company differ materially from those projected in such statements. These forward-looking statements may include, without limitation, statements regarding our ability to meet the conditions of closing of the transaction, including regulatory approvals, our ability to complete the transaction on schedule, if any, and our strategy and performance deleveraging. Among the factors that could cause actual results to differ materially include, but are not limited to, those described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended. December 31, 2020 and other documents filed with the SEC, which identify important factors, but not necessarily all of these factors, that could cause future results to differ materially from those set forth in forward-looking statements. The Company expressly disclaims any obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.
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Vice-President, Finance and Investor Relations