Headwaters Incorporated Announces Closing of Krestmark Industries Acquisition and Associated Financing
23 August 2016 - 8:00PM
Business Wire
(NYSE: HW) HEADWATERS INCORPORATED, a building products
company dedicated to improving lives through innovative
advancements in construction materials, today announced the closing
of its acquisition of Krestmark Industries and the associated
financing.
On August 19, 2016, Headwaters closed the acquisition of
substantially all of the assets of Krestmark Industries for a
purchase price of $240 million, subject to certain adjustments
pursuant to the terms of an Asset Purchase Agreement executed by
the parties on August 1, 2016. Headquartered in Dallas, Texas,
Krestmark is one of the top-performing manufacturers of high
quality vinyl windows in the U.S. Krestmark has developed a
best-in-class business model offering an optimal line of branded
window products to a diverse customer base of homebuilders, lumber
yards, and distributors. The acquisition is a natural extension of
Headwaters’ focus on supplying our customers and homeowners with
attractive products for the exterior of the home.
“We anticipate strong growth for Krestmark in 2017 that should
drive additional revenue to Headwaters’ top line,” said Kirk A.
Benson, Chairman and Chief Executive Officer of Headwaters. “Along
with additional revenue, the transaction should result in expansion
of our Adjusted EBITDA margins, strengthening our position as a top
quartile building products company.”
Headwaters obtained an incremental senior secured term loan in
the aggregate principal amount of $350.0 million (the
“Incremental Term Loan”) to finance the Krestmark acquisition and
to redeem all of Headwaters’ outstanding 7-1/4% Senior Notes due
2019 (the “Senior Notes”). All terms of the Incremental Term Loan
are substantially identical to the existing and outstanding term
loans, including its maturity date of March 24, 2022.
On August 19, 2016, Headwaters mailed notices of redemption to
holders of the Senior Notes communicating that it intends to redeem
all of the remaining $99.0 million principal amount of outstanding
notes on September 18, 2016. The redemption price will be
equal to 103.625% of the principal amount of the Senior Notes, plus
accrued and unpaid interest thereon to the redemption date.
The net proceeds from the borrowing of the Incremental Term Loan
are expected to be approximately $341.6 million, after giving
effect to original issue discount of approximately $0.9 million and
estimated transaction costs of approximately $7.5 million. The net
proceeds were applied to pay the Krestmark purchase price and are
available for the redemption of Headwaters Senior Notes due 2019.
After redemption of our Senior Notes, Headwaters annualized cash
interest expense will be in the range of $31 million.
“Krestmark is excited to join the Headwaters’ team and continue
our strong track record of growth,” said William E. Robinson, Jr.,
President of Krestmark Industries. “Headwaters’ strategy of
focusing on creating value for its customers fits perfectly with
the Krestmark culture and will enable Krestmark to continue to
differentiate itself as a robust, best-in-class windows
company.”
About Headwaters IncorporatedHeadwaters Incorporated is
improving lives through innovative advancements in construction
materials through application, design, and purpose. Headwaters is a
diversified growth company providing products, technologies and
services to the construction materials and building products
markets. Through its construction materials and building products
businesses, the Company has been able to improve sustainability by
transforming underutilized resources into valuable products.
www.headwaters.com
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This press release contains forward-looking statements relating
to Headwaters’ operations that are based on management’s current
expectations, estimates and projections about the industries in
which Headwaters operates. Words such as “may,” “should,”
“anticipates,” “expects,” “intends,” “plans,” “targets,”
“forecasts,” “projects,” “believes,” “seeks,” “schedules,”
“estimates,” “budgets,” “goals,” “outlook” and similar expressions
are intended to help identify such forward-looking statements.
Forward-looking statements include Headwaters’ expectations as to
the managing and marketing of coal combustion products, the
production and marketing of building products, the sales to oil
refineries of residue hydrocracking catalysts, the development,
commercialization, and financing of new products and other
strategic business opportunities and acquisitions, and other
information about Headwaters which are not purely historical by
nature, including those statements regarding Headwaters’ future
business plans, the operation of facilities, the availability of
feedstocks, and the marketability of the coal combustion products,
building products and catalysts. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other factors, many of which are beyond the
Company’s control and are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. The reader should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Unless legally
required, Headwaters undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise. Among the important
factors that could cause actual results to differ materially from
those in the forward-looking statements are: changing feedstock and
energy prices; actions of competitors or regulators; technological
developments; potential disruption of the Company’s production
facilities, transportation networks and information technology
systems due to war, terrorism, malicious attack, civil accidents,
political events, civil unrest or severe weather; potential
environmental liability or product liability under existing or
future laws and litigation; potential liability resulting from
other pending or future litigation; changed accounting rules under
generally accepted accounting principles promulgated by
rule-setting bodies; and the factors set forth under the heading
“Risk Factors” in the Company’s Annual Report on Form 10-K,
quarterly reports on Form 10-Q and other periodic reports. In
addition, such results could be affected by general domestic and
international economic and political conditions and other
unpredictable or unknown factors not discussed in this press
release which could have material adverse effects on
forward-looking statements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160823005416/en/
HEADWATERS INCORPORATEDAT THE COMPANY:Sharon
MaddenVice President of Investor Relations801-984-9400orANALYST
CONTACT:Financial ProfilesTricia Ross, 310-622-8226
Headwaters (NYSE:HW)
Historical Stock Chart
From Apr 2024 to May 2024
Headwaters (NYSE:HW)
Historical Stock Chart
From May 2023 to May 2024