NCI Building (NCS) Enters Agreement to Receive $250M Investment from Clayton, Dubilier & Rice

NCI Building Systems, Inc. (NYSE: NCS) today announced that it has entered into a definitive agreement with Clayton, Dubilier & Rice Fund VIII, L.P., a fund managed by Clayton, Dubilier & Rice, Inc., under which the CD&R Fund will invest $250 million in the Company through the purchase of newly issued Convertible Participating Preferred Shares. This investment is part of a comprehensive solution to address NCI's significant near term debt repayment obligations, reduce debt by $323 million and position the Company for future growth.

The CD&R Fund will have a 72% ownership position in the Company on an as-converted, pro-forma basis. NCI Building Systems' Board of Directors has approved the transaction, which is expected to close by the end of the Company's fiscal year.

The equity investment by the CD&R Fund is conditioned upon the completion of the following:

• The Company has commenced a process to amend its existing $293 million term loan which will include the repayment of approximately $143 million and a modification of the terms and maturity of the remaining $150 million of debt.
  
• The Company will launch an exchange offer to retire its existing convertible notes. For each $1,000 note, the Company will offer a combination of $500 in cash and 125 shares of NCI common stock.
  
• The Company is in the final stages of concluding an agreement for a $125 million asset based loan facility, which is not expected to be drawn at closing.

The Convertible Participating Preferred Shares issued to the CD&R Fund will initially be convertible into approximately 106.8 million shares of common stock at the CD&R Fund's option. Dividends will be payable quarterly either on a cash basis at 8.0% per annum or paid in-kind at 12.0% per annum at the Company's option.

You May Also Be Interested In

• Dow Chemical (DOW) Wins $2.16B in K-Dow Arbitration
• LinkedIn (LNKD) Shares Lower as ITG Warns of Q2 Pricing, Volume Weakness
• BlackRock (BLK) Substantially Boosts Stake in Chesapeake (CHK) -CNBC's Kelly

Create E-mail Alert Related Categories

Corporate News

Related Entities

Dividend

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?

Follow StreetInsider.com On Twitter