Los Angeles, California – Fibre-cement manufacturer James Hardie Industries has announced plans to acquire AZEK Company, a U.S outdoor building products maker, in a deal valued at $8.75 billion, including debt. The acquisition aims to expand James Hardie’s offerings to homeowners and drive growth in the market.
Under the agreement, AZEK shareholders will receive $26.45 in cash and 1.034 James Hardie shares for each AZEK share, amounting to a total per share value of $56.88, representing a 37.4% premium to AZEK’s closing price on Friday. The board of directors at AZEK has recommended accepting the offer, signaling a positive outlook on the acquisition.
AZEK is known for manufacturing wood decking, pergolas, and other outdoor living products, while James Hardie is a prominent player in the fibre-cement industry. The merger is expected to create synergies and enhance operational efficiency, leading to increased profitability and cash flow for the combined company, according to James Hardie’s CEO, Aaron Erter.
Despite the promising prospects of the deal, James Hardie’s Australian-listed shares dipped by 10.4% in early trading on Monday, reflecting some concerns over share dilution. Upon completion of the acquisition, James Hardie and AZEK shareholders are projected to own around 74% and 26% of the merged entity, respectively.
The $8.75 billion transaction includes assuming AZEK’s net debt of $386 million. James Hardie anticipates generating at least $350 million in additional earnings post-acquisition, with an estimated $125 million in cost savings. The combined company’s shares will be listed on the New York Stock Exchange, while the Australian CDI listing will remain in place.
Headquartered in Ireland with a management team based in Chicago, James Hardie plans to finance the cash portion of the transaction through debt financing using a fully committed bridge facility. Additionally, the company intends to repurchase up to $500 million in shares within the first 12 months following the deal’s closure.
The merger between James Hardie and AZEK is projected to be finalized in the second half of 2025, pending regulatory approvals. This strategic move is poised to create a powerhouse in the building products industry, offering a diverse range of products to customers and driving innovation in the market.