Fortune Brands Home & Security Inc FBHS.N said it would acquire Norcraft Cos Inc NCFT.N for $441.4 million to expand its bathroom and kitchen cabinet business.
Fortune, which makes MasterBrand cabinets and Moen faucets, will pay $25.50 per share, a premium of 11.4 percent to Norcraft’s Friday closing price.
The deal has an enterprise value of about $600 million, including debt.
Norcraft, a seller of kitchen and bathroom cabinets in North America under the brands including Mid Continent, Norcraft, UltraCraft, StarMark, Fieldstone, and Urban Effects, reported sales of $376 million for 2014.
Deerfield, Illinois-based Fortune Brands gets over 40 percent of sales from its cabinets business. It also makes Therma-Tru entry door systems and Master Lock and SentrySafe security products.
Norcraft, which has a market value of about $396 million, reported on Monday a 16.7 percent rise in sales to $94 million for the fourth quarter ended Dec. 31.
Fortune Brands plans to finance the transaction with its existing credit facility and expects to launch a tender offer for all outstanding Norcraft shares in about 15 days.
“The combination will strengthen our overall product offering, round out our regional market penetration and enhance our frameless capabilities. We see many opportunities for enhanced growth by bringing these businesses together,” Fortune Brands Chief Executive Chris Klein said in a statement.
Norcraft’s shares were up about 11 percent at $25.40 in premarket trading. Fortune’s shares, which closed at $44.29 on the New York Stock Exchange on Friday, were not trading yet.
Reporting by Shailaja Sharma in Bengaluru; Editing by Maju Samuel; firstname.lastname@example.org; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 3654; Reuters Messaging: email@example.com