MASONITE INTERNATIONAL CORP: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Disclosure of Settlement FD, Financial Statements and Exhibits (Form 8 -K)



Item 1.01 Conclusion of a definitive material agreement.

Securities purchase agreement

On November 2, 2022, Masonite Corporation, a Delaware Corporation ("Buyer"), a
wholly-owned subsidiary of Masonite International Corporation, a British
Columbia corporation ("Masonite"), entered into a Securities Purchase Agreement
(the "SPA"), by and among Cyprium Investors V LP, a Delaware limited partnership
("Cyprium Investors V"), Cyprium Parallel Investors V LP, a Delaware limited
partnership ("Cyprium Parallel V"), 1492 Capital LLC, an Ohio limited liability
company ("1492 Capital"), Nationwide Defined Benefit Master Trust, an employee
pension plan organized in New York ("Nationwide"), Bruce Procton, a natural
person, the Rose E. Procton Irrevocable Trust u/a/d 12/31/12, the Alexander M.
Procton Irrevocable Trust u/a/d 12/31/12, the Jonas M. Procton Irrevocable Trust
u/a/d 12/31/12, Kevin MacDonald, a natural person, Walter Hammond, a natural
person, Greg McGehee, a natural person, and Larry Repar, a natural person
(collectively, the "Endura Stockholders"), Cyprium Investors V, Cyprium Parallel
V, 1492 Capital and Nationwide (collectively, the "Endura Warrant Holders"), EPI
Holdings, Inc., a Delaware corporation ("Endura"), and Bruce Procton, a natural
person, as Endura's equityholders' representative, pursuant to which Buyer will
acquire all of the rights and interests in and to the capital stock of Endura
(the "Acquisition", and together with the other transactions contemplated
therein, the "Transactions").


The total cash consideration payable by Buyer to Endura's equityholders for the
Acquisition is $375 million (the "Base Purchase Price"), subject to customary
adjustments for cash, indebtedness, transaction expenses, change of control
payments and working capital. $20 million from the Base Purchase Price will be
held back by Buyer from the closing purchase price to secure any purchase price
adjustment and satisfy certain indemnification claims.

Closing conditions

The consummation of the Transactions is subject to the satisfaction or waiver of
certain customary closing conditions, including, but not limited to, (a) the
accuracy of each party's representations and warranties (subject to customary
materiality and other qualifiers), (b) each party's performance and compliance
with its covenants contained in the SPA, (c) the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, (d) receipt of certain consents from commercial counterparties of
Endura, and (e) the absence of any statute, rule, regulation, order, injunction
or decree or other legal restraint or prohibition (whether temporary,
preliminary or permanent), in each case, that the effect of restraining,
enjoining or otherwise prohibiting or makes illegal the consummation of the


The total consideration payable by the buyer is expected to be funded by a combination of cash on hand, borrowings under the Amended ABL Facility (as defined below) and a new scheduled term loan. The Operations are not subject to a financing condition.

Representations, Warranties and Covenants

The SPA contains customary representations, warranties and covenants. Certain
key executives of Endura will be subject to non-compete and non-solicitation
obligations for a period of between three to five years following the closing.


The SPA contains indemnification obligations of certain Endura's equityholders
for breaches of representations and warranties and pre-closing covenants,
subject to certain limitations. Except for certain fundamental representations
and fraud, the indemnification obligations of such former Endura's equityholders
is limited to $18 million, and at the second-anniversary date of the closing
date, any remaining funds will be released to such former Endura's
equityholders, subject to any then-pending claims.

Cancellation rights

The SPA may be terminated under certain circumstances prior to the closing of
the Transactions, (i) by mutual written consent of Buyer, Endura or the Endura's
equityholders' representative, (ii) by either Buyer or Endura or the Endura's
equityholders' representative if the other party breaches its representations,
warranties or covenants such that the applicable condition in the SPA would not
be satisfied, and such party fails to cure such breach (other than for certain
limited exceptions), (iii) by either Buyer, Endura or the Endura's
equityholders' representative if the Transactions are not consummated by
December 31, 2022, subject to one automatic 30-day extension followed by an
additional 30-day extension if mutually agreed between the parties, in each
case, if the only remaining condition to be satisfied related to the failure to
obtain regulatory approval, (iv) by Buyer, if a


material adverse effect on Endura occurs and (v) by either Buyer, Endura or the
Endura's equityholders' representative if any governmental entity issues an
order or taken any other action restraining, enjoining or otherwise prohibiting
or makes illegal the consummation of the Transactions and such order or other
action has become final and non-appealable.

The description of the SPA set forth under this Item 1.01 does not purport to be
complete and is qualified in its entirety by reference to the full text of the
SPA, which is attached hereto as Exhibit 2.1 and incorporated herein by

Modification of the ABL installation

The information set forth below in Section 2.03 of this Current Report on Form 8-K is incorporated by reference into this Section 1.01.

Item 2.03        Creation of a Direct Financial Obligation or an Obligation under an
                 Off-Balance Sheet Arrangement of a Registrant.

Modification of the ABL installation

On October 28, 2022, Masonite and certain of its subsidiaries entered into an
amendment (the "ABL Amendment") to our asset-based revolving credit facility,
dated as of January 31, 2019 (as amended prior to the date hereof, the "ABL
Facility" and, as amended by the ABL Amendment, the "Amended ABL Facility"),
which, among other things, (i) increased the revolving credit commitments
available thereunder by $100 million (subject to certain specified sublimits
available thereunder as specified therein) to an aggregate amount of $350
million and (ii) replaced the LIBOR-based interest rate applicable to borrowings
thereunder in U.S. dollars with an interest rate based on the sum of (x) a "Term
SOFR" rate published by the CME Group Benchmark Administration Limited (CBA)
plus (y) 10 basis points. The terms of the ABL Facility remained otherwise
substantially unchanged.

The description of the ABL Amendment set forth under this Item 2.03 does not
purport to be complete and is qualified in its entirety by reference to the full
text of the ABL Amendment, which is attached hereto as Exhibit 10.1 and
incorporated herein by reference.

Section 7.01 Disclosure of FD Rules.

On November 3, 2022, Masonite has issued a press release regarding the Transactions. The press release is provided as Exhibit 99.1 to this Form 8-K.

The information and exhibit provided pursuant to this Item 7.01 shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities under that Section 18, and shall not be deemed to be incorporated by
reference into any filing of the Company under the Securities Act of 1933, as
amended, or the Exchange Act, except as may be expressly set forth by specific
reference in such a filing.

Forward-looking statements

This Current Report on Form 8-K contains "forward-looking statements" within the
meaning of the federal securities laws, including our discussion of the pending
acquisition of Endura, including its expected closing date, the receipt of
required regulatory approvals and our ability to successfully integrate Endura's
business and achieve the expected synergies, and statements relating to our
economic performance and financial condition, including, in particular,
statements relating to our business and growth strategy and product development
efforts and ability to achieve the revenues, cost savings, synergies and other
anticipated benefits associated with the pending transaction. When used in this
Current Report on Form 8-K, such forward-looking statements may be identified by
the use of such words as "may," "might," "could," "will," "would," "should,"
"expect," "believes," "outlook," "predict," "forecast," "objective," "remain,"
"anticipate," "estimate," "potential," "continue," "plan," "project,"
"targeting," or the negative of these terms or other similar terminology.

Forward-looking statements involve significant known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of Masonite, or industry results, to be materially different
from any future plans, goals, targets, objectives, results, performance or
achievements expressed or implied by such forward-looking statements. As a
result, such forward-looking statements should not be read as guarantees of
future performance or results, should not be unduly relied upon, and will not
necessarily be accurate indications of whether or not such results will be
achieved. Factors that could cause actual results to differ materially from the
results discussed in the forward-looking statements include, but are not limited
to, downward trends in our end markets and in economic conditions; reduced
levels of residential new construction, residential repair, renovation and
remodeling, and non-residential building construction activity due to increases
in mortgage rates, changes in mortgage interest deductions and related tax
changes and reduced availability of financing; competition; the


continued success of, and our ability to maintain relationships with, certain
key customers in light of customer concentration and consolidation; our ability
to accurately anticipate demand for our products; impacts on our business
including seasonality, weather and climate change; scale and scope of the
ongoing coronavirus ("COVID-19") pandemic and its impact on our operations,
customer demand and supply chain; inflation, including increases in prices of
raw materials and fuel; tariffs and evolving trade policy and friction between
the United States and other countries, including China, and the impact of
anti-dumping and countervailing duties; increases in labor costs, the
availability of labor, or labor relations (i.e., disruptions, strikes or work
stoppages); our ability to manage our operations including potential
disruptions, manufacturing realignments (including related restructuring
charges) and customer credit risk; product liability claims and product recalls;
our ability to generate sufficient cash flows to fund our capital expenditure
requirements, to meet our pension obligations and to meet our debt service
obligations, including our obligations under the ABL Facility; limitations on
operating our business as a result of covenant restrictions under our existing
and future indebtedness, including our senior notes and ABL Facility;
fluctuating foreign exchange and interest rates; our ability to replace our
expiring patents and to innovate, keep pace with technological developments and
successfully consummate and integrate acquisitions; the continuous operation of
our information technology and enterprise resource planning systems and
management of potential cyber security threats and attacks; political, economic
and other risks that arise from operating a multinational business; uncertainty
relating to the United Kingdom's exit from the European Union; retention of key
management personnel; and environmental and other government regulations,
including the United States Foreign Corrupt Practices Act ("FCPA"), and any
changes in such regulations. For a more detailed discussion of these factors,
see the information under the captions "Risk Factors," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Forward
Looking Statements" in our most recent annual report on Form 10-K filed with the
SEC on February 24, 2022, in each case as updated by our subsequent filings with
the SEC. Masonite undertakes no obligation to publicly update or revise any
forward-looking statement as a result of new information, future events or
otherwise, except as otherwise required by law.

Item 9.01 Financial statements and supporting documents.

Exhibit No.                 Description

  2.1                       Securities Purchase Agreement, dated as of 

November 2, 2022by and among

                            Masonite, Endura, Endura Stockholders, Endura 

Mandate holders and Endura

                            equityholders' representative
  10.1                      Amendment No. 3 to the Second Amended and 

Restated credit agreement and

                            Facility Increase Amendment, dated as of 

October 28, 2022by and among

                            Masonite, Masonite Corporation, Premdor Crosby 

limited, the other

                            subsidiary of Masonite party thereto, each 

lending party and Wells

                            Fargo Bank, National Association, as administrative agent
  99.1                      Press release issued by Masonite International Corporation on November 3,
104                         Cover Page Interactive Data File (formatted as

Inline XBRL and content in

                            Exhibit 101)

* Appendices and certain exhibits have been omitted in accordance with SK Rule 601(b)(2). The declarant hereby undertakes to provide in addition to the SECOND on demand.


————————————————– ——————————

© Edgar Online, source Previews

Source link


Comments are closed.