March 27, 2025 | Industrials | Asia | Active

AZEK / James Hardie: Deal Insight


On 24-Mar-25, James Hardie Industries, a global building materials group headquartered in Ireland but trading through depositary receipts in the US and Australia (JHX AU), agreed to acquire US-based decking manufacturer AZEK Company through a cash-and-stock deal valued at $8.75bn, including debt. AZEK shareholders will receive $26.45 in cash and 1.0340 James Hardie ordinary shares – worth $56.88 per share based on James Hardie’s closing share price on 21-Mar-25, the last trading day prior to the announcement. The offer implies a 37.4% one-day premium. Upon completion, James Hardie shareholders will hold 74% of the combined entity, with AZEK shareholders owning the remaining 26%. The merged company will list James Hardie’s ordinary shares on the NYSE, while maintaining its CDI listing and index inclusion on the ASX. Leadership of the combined group will remain with James Hardie CEO Aaron Erter and CFO Rachel Wilson, while AZEK’s CEO, Jesse Singh, will join the acquirer’s board. To fund the cash portion, James Hardie has secured fully committed bridge financing, arranged by Bank of America and Jefferies. The company plans to refinance this with long-term debt and seeks to preserve a strong investment-grade credit rating. The boards of both companies have unanimously approved the transaction. Conditions to closing include approval from AZEK shareholders (50%; no vote required from James Hardie shareholders) and regulatory clearances under HSR, with a filing expected by 28-Apr-25 (25 business days from signing). The merger agreement includes customary covenants and representations, with standard carve-outs to the MAC for wars and pandemics. AZEK is subject to a no-solicitation clause, though it retains a fiduciary out, and both parties are bound by best-efforts obligations to secure regulatory approvals, including a commitment to take “all actions necessary” to resolve any antitrust issues. James Hardie has agreed to offer remedies if required, including divestments, though capped at businesses generating up to $140m in FY’24 sales (the target generated $1.4bn in revenue in 2024, so 10% of total revenues). James Hardie will file a preliminary Form F-4 registration statement “as promptly as reasonably practicable,” with AZEK’s shareholder meeting scheduled for 50 days following the registration becoming ...


Contents

  • Merger Agreement
  • Merger Rationale
  • Shareholder Vote
  • Antitrust Considerations
  • Trading Recommendation





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