American Woodmark to acquire RSI Home Products for $1.075 billion
Staff Writer |
American Woodmark Corporation announced that it has entered into a definitive agreement and plan of merger with RSI Home Products.
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Under the terms of the agreement, the implied enterprise value for RSI is approximately $1.075 billion, including $140 million in American Woodmark common stock to be issued to RSI shareholders (based on the most recent 5 trading day average closing price), approximately $346 million in net cash to be paid to RSI shareholders and approximately $589 million of RSI debt to be assumed by American Woodmark.
The cash portion of the consideration is subject to customary working capital adjustments.
Founded in 1989 by Ron Simon with a vision of creating exceptional value for customers by providing high quality products at affordable prices not otherwise available in the industry, RSI has grown to one of the largest in-stock and value-based cabinet makers in North America.
RSI expects to generate net income of over $40 million and adjusted EBITDA of over $120 million on approximately $560 million of revenue for its fiscal year ending December 31, 2017, representing an adjusted EBITDA margin of over 21%.
The acquisition is expected to be immediately accretive to American Woodmark's profit margins and earnings per share (EPS), excluding transaction costs and before giving effect to anticipated synergies.
Although there can be no assurance, the transaction is expected to close in American Woodmark's quarter that ends January 31, 2018, subject to antitrust regulatory review and approvals and other customary closing conditions.
The transaction does not require approval of American Woodmark shareholders and has already received approval from the RSI shareholders. ■
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