NCI Building Systems (NCS) to Acquire Metl-Span in $145M Cash Deal; Will Stop Paying Certain Preferred Dividends
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NCI Building Systems, Inc. (NYSE: NCS) announced that it has entered into a definitive agreement to purchase Metl-Span LLC ("Metl-Span") from a subsidiary of BlueScope Steel North America Corporation for $145 million in cash. Metl-Span, a leader in insulated metal panel development for over forty years, operates five manufacturing facilities in the United States serving the nonresidential building products market with cost-effective and energy efficient insulated metal wall and roof panels. For the year ended December 31, 2011, Metl-Span had estimated revenues of $170 million. The acquisition is subject to a number of closing conditions, including the expiration or termination of any applicable waiting period under the Hart Scott Rodino Act.
In connection with the transaction, NCI will refinance its existing asset-based lending facility ("ABL") and term loan, which were both set to mature in 2014. NCI has secured a new fully committed ABL and term loan that will be used, together with cash on hand, to fund the acquisition.
Debevoise & Plimpton LLP acted as legal advisor and Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to NCI.
NCI Reaches Agreement with Holders of Convertible Preferred Stock to Eliminate Future Dividend Obligations
The Company also announced today that it has reached an agreement in principle with Clayton, Dubilier & Rice and affiliates (CD&R), the holders of NCI's convertible preferred shares, to eliminate NCI's quarterly dividend obligation on the preferred shares, which accrued at an annual rate of 12% unless paid in cash at 8%.
Under the terms of the Certificate of Designations, Preferences and Rights of Series B Cumulative Convertible Participating Preferred Stock, the Company was contractually obligated to pay quarterly dividends to the holders of the convertible preferred shares from October 20, 2009, through October 20, 2019, subject to certain dividend "knock-out" provisions. The agreement in principle announced today achieves immediate "knock-out" of the dividend.
In exchange for agreeing to the dividend elimination, CD&R will receive a total of 37,834 additional shares of convertible preferred stock, representing (i) $6.5 million of dividends accrued from March 15, 2012 through May 18, 2012 (20 trading days after April 20, 2012, on which date the dividend "knock-out" measurement period commenced) and (ii) $31.4 million in additional liquidation preference of convertible preferred stock, or 10% of the total $313.7 million of accreted value as of May 18, 2012. As a result of this agreement, funds managed by CD&R will hold preferred stock with an aggregate liquidation preference and accrued dividends of approximately $345 million. The preferred stock and accrued dividends entitle the funds managed by CD&R to receive approximately 54.1 million shares of common stock, representing 72.7% of the voting power and common stock of the Company on an as-converted basis and an increase of approximately 2% from CD&R's current position.
This one-time, non-cash payment will be reflected in NCI's fiscal third fiscal quarter 2012 financial statements and will eliminate virtually all future charges relating to "convertible preferred stock dividends and accretion" and the "convertible preferred stock beneficial conversion feature" in subsequent quarters.
The agreement-in-principle with CD&R has been approved by NCI's independent directors. Greenhill & Co. acted as financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to NCI.
NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States and Mexico, with additional sales and distribution offices throughout the United States and Canada.
In connection with the transaction, NCI will refinance its existing asset-based lending facility ("ABL") and term loan, which were both set to mature in 2014. NCI has secured a new fully committed ABL and term loan that will be used, together with cash on hand, to fund the acquisition.
Debevoise & Plimpton LLP acted as legal advisor and Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to NCI.
NCI Reaches Agreement with Holders of Convertible Preferred Stock to Eliminate Future Dividend Obligations
The Company also announced today that it has reached an agreement in principle with Clayton, Dubilier & Rice and affiliates (CD&R), the holders of NCI's convertible preferred shares, to eliminate NCI's quarterly dividend obligation on the preferred shares, which accrued at an annual rate of 12% unless paid in cash at 8%.
Under the terms of the Certificate of Designations, Preferences and Rights of Series B Cumulative Convertible Participating Preferred Stock, the Company was contractually obligated to pay quarterly dividends to the holders of the convertible preferred shares from October 20, 2009, through October 20, 2019, subject to certain dividend "knock-out" provisions. The agreement in principle announced today achieves immediate "knock-out" of the dividend.
In exchange for agreeing to the dividend elimination, CD&R will receive a total of 37,834 additional shares of convertible preferred stock, representing (i) $6.5 million of dividends accrued from March 15, 2012 through May 18, 2012 (20 trading days after April 20, 2012, on which date the dividend "knock-out" measurement period commenced) and (ii) $31.4 million in additional liquidation preference of convertible preferred stock, or 10% of the total $313.7 million of accreted value as of May 18, 2012. As a result of this agreement, funds managed by CD&R will hold preferred stock with an aggregate liquidation preference and accrued dividends of approximately $345 million. The preferred stock and accrued dividends entitle the funds managed by CD&R to receive approximately 54.1 million shares of common stock, representing 72.7% of the voting power and common stock of the Company on an as-converted basis and an increase of approximately 2% from CD&R's current position.
This one-time, non-cash payment will be reflected in NCI's fiscal third fiscal quarter 2012 financial statements and will eliminate virtually all future charges relating to "convertible preferred stock dividends and accretion" and the "convertible preferred stock beneficial conversion feature" in subsequent quarters.
The agreement-in-principle with CD&R has been approved by NCI's independent directors. Greenhill & Co. acted as financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to NCI.
NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States and Mexico, with additional sales and distribution offices throughout the United States and Canada.
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