The AZEK Company (AZEK) Business Combination summary

Deal rationale and strategic fit

• Creates a leading growth platform in exterior and outdoor living building products by combining two fast-growing, complementary companies with strong brands and innovative offerings across siding, decking, railing, trim, and accessories.

• Expands the total addressable market in North America to $23 billion and increases exposure to the repair and remodel segment, leveraging strong U.S. housing fundamentals.

• Accelerates material conversion-led growth and provides customers with a comprehensive suite of leading exterior brands and solutions.

• Both companies share a contractor-driven, customer-focused approach, strong track record of above-market growth, and a commitment to sustainability and innovation.

• The combination is expected to unlock significant value through higher growth, synergies, and enhanced value proposition for customers and contractors.

Financial terms and conditions

• James Hardie will acquire AZEK for $8.75 billion, including AZEK's net debt of $386 million as of December 31, 2024.

• AZEK shareholders will receive $26.45 in cash and 1.0340 James Hardie shares per AZEK share, totaling $56.88 per share and representing a 26% premium to AZEK’s 30-day VWAP.

• Post-transaction, James Hardie and AZEK shareholders will own approximately 74% and 26% of the combined company, respectively.

• Fully-committed financing is secured from Bank of America and Jefferies LLC; cash portion funded through debt financing.

• The transaction was unanimously approved by both boards and is expected to close in the second half of 2025, subject to AZEK shareholder and regulatory approvals.

Synergies and expected cost savings

• At least $125 million in cost synergies and $225 million in commercial synergies targeted, totaling $350 million in annual adjusted EBITDA uplift within five years post-closing.

• Full run-rate cost synergies expected within three years, commercial synergies within five years post-close.

• Estimated $350 million in total costs from 2026 to 2030 to realize synergies.

• Synergies expected to accelerate cash EPS growth and deliver ROIC above cost of capital in the medium term.

• Combined company expects robust annual free cash flow exceeding $1 billion after achieving run-rate synergies.