Key Takeaways
Shares of The AZEK Company ( AZEK ) soared 14% Monday when the manufacturer of outdoor living products agreed to be purchased by Australian building materials maker James Hardie Industries ( JHX ) for $8.75 billion in cash and stock, including $386 million of net debt.
The agreement calls for AZEK shareholders to receive $26.45 per share in cash, plus 1.034 James Hardie shares, for a total compensation of $56.88 per share. That's a 37% premium over AZEK’s closing price on Friday.
James Hardie CEO Calls Acquisition 'Extraordinary Opportunity'
James Hardie CEO Aaron Erter called the purchase "an extraordinary opportunity to accelerate our growth strategy, deliver enhanced and differentiated solutions to our customers and drive shareholder value." Erter said that James Hardie expects "to significantly enhance the combined company's profitability and cash flow ."
AZEK makes TimberTech decking and railing, Versatex and AZEK Trim, and StruXure pergolas. James Hardie is behind such brands as Hardie Plank, Hardie Panel, Hardie Trim, Cemboard, and Prevail.
The transaction is expected to close in the second half of this year.
U.S.-listed shares of James Hardie sank 18% on the news. Both companies’ shares are trading in negative territory over the past year.
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