Venice's PGTI cancels merger with Tampa company for all-cash deal with Pennsylvania firm

Venice-based PGT Innovations (NYSE: PGTI) has terminated a $3 billion deal with Tampa-based Masonite (NYSE: DOOR) in favor of an all cash offer from Miter Brands, according to a news release.

The new merger agreement calls for the private Pennsylvania-based company to acquire PGT Innovations for $42 per share. The news release put the total transaction "enterprise value" at about $3.1 billion.

The previous transaction valued at $3 billion would have seen PGT shareholders retain 16% ownership in the combined company with shareholders receiving $33.50 per share in cash.

Miter Brands manufactures residential doors and windows largely under two brand names — MI Windows and Milgard Windows and Doors. The company currently owns 10 manufacturing facilities throughout the country, with a focus on quality and "family-first" values.

Matt DeSoto, the president and chief executive of Miter Brands, said the two companies "are fully aligned in providing world-class service and the finest products with a culture where people performance, and customer experiences come first."

"Our product mix and geographic presence are highly complementary and we look forward to delivering enhanced value to our team members, customers, suppliers and local communities."

Masonite also announced the termination of the previous merger deal, noting it would be paid the $84 million termination fee required to break the deal. The company also did not counter the offer made by Miter Brands. Miter Brands will pay the $84 million fee, according to a news release from the private company.

“The decision to waive our right to increase our offer reflects our commitment to financial discipline and rigor in our strategic investments,” said Howard Heckes, president and CEO of Masonite.

The Miter offer reflects a 60% premium on PGT Innovations' stock price prior to details on the possible acquisition becoming public. The Venice-based company's stock value is up more than 100% compared to a year ago, a meteoric rise in value for PGTI shareholders. Last Jan. 17 the stock price was $19.80.

“We are thrilled to have reached an agreement with Miter that maximizes value for PGTI shareholders," said the firm President and Chief Executive Jeff Jackson. "Since PGTI’s founding over 40 years ago, we have delivered profitable growth and created significant shareholder value by serving our customers with the high-quality window and door solutions they need. In Miter, we have found a strong partner that shares our commitment to safety, quality, and innovation.”

Previous coverage: Venice's PGT will entertain counter to $3 billion merger with Tampa-based Masonite

More: Sarasota business community embraces PGT deal even as headquarters expected to shift north

PGTI, one of the largest employers in Sarasota County, has long been a supporter of the local business community, often sponsoring local Chamber of Commerce events, with their employees serving with community organizations.

“Miter believes that maintaining a significant presence in Venice is important to the ongoing operations of the business," the PGTI said in response to a request seeking comment on impacts to the company's workforce from the deal.

The Miter transaction is expected to close mid-2024 once PGTI shareholders sign off on the deal and all regulatory hurdles are cleared.

Financing for the deal will come "in part by an equity investment from Koch Equity Development LLC, the investment and acquisition arm of Koch Industries Inc., a current investor in Miter.

"Koch Equity Development is excited to support the DeSoto family along with the entire Miter Brands team in building the most valued window and door brand in America with our third equity investment since 2019," said Richard Hunt, managing director at Koch Equity Development. "We are confident that Miter’s acquisition of PGTI will result in long-term value creation for all of Miter’s stakeholders and constituencies."

This article originally appeared on Sarasota Herald-Tribune: PGT Innovations cancels Masonite merger, OKs deal with Miter Brands