NCI Building Systems Announces Unit Purchase Agreement with Environmental Materials, LLC

NCI Building Systems, Inc. (“NCI” or the “Company”) announced that it has entered into a Unit Purchase Agreement with Environmental Materials, LLC (“Environmental Stoneworks”) and certain of its affiliates to purchase 100% of the outstanding limited liability company interests of Environmental Stoneworks.

Under the terms of the Unit Purchase Agreement, NCI will pay $186 million for the interests and plans to finance the transaction through a combination of cash on hand and borrowings under its existing revolving credit facilities. The purchase price is subject to certain customary post-closing adjustments including debt and working capital. During fiscal 2017, Environmental Stoneworks generated $160 million in revenues. Based upon 2018E Adjusted EBITDA and giving effect to anticipated cost synergies, the transaction is expected to result in a purchase price multiple of 5.5x, with a minimal impact on NCI’s leverage ratio. The transaction closing is subject to a number of customary conditions, including, among others, the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The transaction is expected to close during the first quarter of 2019.

“The acquisition of Environmental Stoneworks significantly increases NCI’s geographical footprint in manufactured stone products, one of the fastest growing categories of exterior cladding materials. It positions us to better serve our residential customers, while creating considerable cross selling opportunities with our commercial customers,” said James S. Metcalf, Chairman of the Board and Chief Executive Officer. “The transaction directly supports NCI’s industrial logic and value proposition adding to our already strong residential, repair & remodel and commercial platform.”

“Along with adding a profitable, growing business, we look forward to welcoming Chuck Stein to NCI as President of our combined stone businesses at the close of the transaction,” added Mr. Metcalf. “Chuck has served as President and CEO of Environmental Stoneworks for over ten years and brings a wealth of knowledge and experience in product innovation, business expansion and transformative solutions that will be invaluable to our customers.”

Environmental Stoneworks is the only national manufacturer and installer of stone veneer for the residential and commercial markets. The company offers a broad range of products suitable for local preferences along with installation services to ensure a complete turnkey solution. Environmental Stoneworks has five manufacturing facilities, twenty-one installation centers and approximately 660 employees in the United States.

About NCI Building Systems

The combination of NCI and Ply Gem, headquartered in Cary, NC, established a leading exterior building products manufacturer with a broad range of products to residential and commercial customers for both new construction and repair & remodel. With a portfolio of key products which includes windows, doors, siding, metal wall and roof systems, engineered commercial buildings, insulated metal panels, stone and other adjacent products, the Company has more than 20,000 employees across 80 manufacturing, distribution and office locations throughout North America.

Contact:

K. Darcey Matthews – Vice President Investor Relations – (281) 897-7785

Source: NCI Building Systems, Inc.