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Acquisitions | 9 Months Ended
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Sep. 28, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisitions | Acquisitions American Woodmark On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark Corporation (“American Woodmark”), a Virginia corporation, in an all-stock transaction. The Company, Maple Merger Sub, Inc. (“Merger Sub”), a Virginia corporation and direct, wholly owned subsidiary of the Company, and American Woodmark entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company (the “Merger”). Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each equity interest of American Woodmark issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive a number of shares of the Company’s common stock equal to 5.15 shares, which collectively will represent approximately 37 percent of the fully diluted shares outstanding of the combined company immediately prior to the execution and delivery of the Merger Agreement. The closing of the Merger, which is expected to occur in early 2026, is subject to the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of other customary closing conditions. Both companies received the necessary shareholder approval at their respective special meetings of shareholders held on October 30, 2025. The Merger Agreement contains certain termination rights for each of the Company and American Woodmark. Upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay American Woodmark a termination fee of $30.0 million or a regulatory termination fee of $35.0 million. In addition, upon termination under specified circumstances, American Woodmark may be required to pay the Company a termination fee of $25.0 million. The Company amended its 2024 Credit Agreement on November 3, 2025 to obtain $375.0 million of delayed draw term loan commitments that will be used to repay and terminate American Woodmark’s existing indebtedness, the funding of which is dependent on the closing of the Merger. The interest rate of the delayed draw term loans is a variable rate based on the Secured Overnight Financing Rate (“SOFR”), plus, a margin depending on the Company’s net leverage ratio. The delayed draw term loans will have a maturity coterminous with the revolving credit facility under the 2024 Credit Agreement in June 2029, and there were no material changes to the covenants in place under the 2024 Credit Agreement. See Note 10, "Debt," for further discussion of our original credit agreement. Supreme On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, the parent company of Supreme Cabinetry Brands, Inc. (“Supreme”), a cabinetry company, from GHK Capital Partners LP for $520.0 million in cash. Supreme is a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products. Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafts framed and frameless cabinetry for a nationwide network of dealers. The combined company is reaching more customers, through its highly complementary dealer networks, with greater efficiency and effectiveness. Through this transaction, MasterBrand broadened its portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories, further diversifying its channel distribution and adding to its strategically located facility footprint. The acquisition was funded with a combination of cash on hand and proceeds from our revolving credit facility. The purchase consideration was $527.3 million.
(U.S. Dollars presented in millions) |  |
Cash considerations paid to Supreme shareholders |  | $ | 336.4 |
Cash paid for transaction costs of Supreme |  | 13.9 |
Repayment of Supreme existing indebtedness and accrued interest |  | 178.2 |
Total Cash Consideration |  | $ | 528.5 |
Purchase price adjustments |  | (1.2) |
Total Purchase Consideration |  | $ | 527.3 |
The purchase price of Supreme was allocated on a preliminary basis as of the closing date of July 10, 2024. Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed of Supreme were recognized and measured at fair value. Due to the timing of acquisition close, the preliminary fair value estimates and assumptions were subject to change as we obtained additional information over the measurement period of up to one year from the date of acquisition. Since the initial measurement of the identified assets acquired and liabilities assumed, progress was made in completing certain of our additional valuations and analyses and disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024. We finalized our valuation of the identified assets acquired and liabilities assumed during the period ended June 29, 2025. There were no adjustments to the preliminary valuation of identifiable assets acquired and liabilities assumed during the twenty-six weeks ended June 29, 2025. The following table sets forth the allocation of the purchase consideration to the assets acquired and liabilities assumed of Supreme, with the excess recorded to goodwill:
(U.S. Dollars presented in millions) |  |  |  |  |  |
Net Assets Acquired |  | Initial Purchase Price Allocation |  | Measurement Period Changes |  | Updated Purchase Price Allocation
Cash and cash equivalents |  | $ | 11.8 |  |  | $ | — |  |  | $ | 11.8 |
Accounts receivable |  | 11.5 |  |  | — |  |  | 11.5 |
Inventories |  | 17.3 |  |  | (0.3) |  |  | 17.0 |
Other current assets |  | 2.1 |  |  | (0.1) |  |  | 2.0 |
Property, plant and equipment |  | 115.9 |  |  | (0.5) |  |  | 115.4 |
Operating lease right-of-use assets |  | 17.6 |  |  | — |  |  | 17.6 |
Other intangible assets |  | 256.9 |  |  | 2.3 |  |  | 259.2 |
Other assets |  | 1.9 |  |  | — |  |  | 1.9 |
|  | $ | 435.0 |  |  | $ | 1.4 |  |  | $ | 436.4 |
Accounts payable |  | $ | 7.2 |  |  | $ | — |  |  | $ | 7.2 |
Current operating lease liabilities |  | 2.4 |  |  | — |  |  | 2.4 |
Other current liabilities |  | 18.0 |  |  | — |  |  | 18.0 |
Deferred income taxes |  | 69.8 |  |  | (0.6) |  |  | 69.2 |
Operating lease liabilities |  | 15.1 |  |  | — |  |  | 15.1 |
Other non-current liabilities |  | 0.3 |  |  | 0.3 |  |  | 0.6 |
|  | $ | 112.8 |  |  | $ | (0.3) |  |  | $ | 112.5 |
Net Assets Acquired |  | $ | 322.2 |  |  | $ | 1.7 |  |  | $ | 323.9 |
Goodwill |  | 204.9 |  |  | (1.5) |  |  | 203.4 |
Purchase Consideration |  | $ | 527.1 |  |  | $ | 0.2 |  |  | $ | 527.3 |
The estimated value of Property, Plant and Equipment includes adjustments totaling $73.2 million to increase the net book value of $42.2 million to the preliminary fair value estimate of $115.4 million. This estimate is based on other comparable acquisitions and historical experience, and preliminary expectations as to the duration of time we expect to realize benefits from those assets. The estimated fair values of identifiable intangible assets acquired were prepared using an income valuation approach, which requires a forecast of expected future cash flows either through the use of the relief-from-royalty method or the multi-period excess earnings method. The estimated useful lives are based on our historical experience and expectations as to the duration of time we expect to realize benefits from those assets. We applied significant judgment in determining the fair value of the intangible assets, which involved the use of Level 3 inputs, including estimates and assumptions of forecasted revenue growth rates, estimated earnings, customer attrition rates, assumed royalty rates and market-participant discount rates, as applicable. The estimated fair values of the identifiable intangible assets acquired, their estimated useful lives and the related valuation methodology are as follows:
(U.S. Dollars presented in millions) |  |  |  |  |  |
Asset Type |  | Fair Value |  | Useful Life |  | Valuation Methodology
Customer relationships |  | $ | 174.1 |  |  | 17.5 years |  | Multi-period excess earnings
Tradenames |  | 85.1 |  |  | Indefinite |  | Relief from royalty method
Total other intangible assets |  | $ | 259.2 |  |  |  |  |
The Company recognized $203.4 million of goodwill, of which $180.8 million is tax deductible. The $203.4 million of goodwill recognized is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and Supreme’s assembled workforce. Pro forma financial information Net sales and earnings related to the operations of Supreme that have been included in our condensed consolidated statements of income for the thirteen and thirty-nine weeks ended September 28, 2025 are as follows:
|  | 13 Weeks Ended |  | 39 Weeks Ended
(U.S. Dollars presented in millions) |  | September 28, 2025 |  | September 29, 2024 |  | September 28, 2025 |  | September 29, 2024
Net Sales |  | $ | 62.9 |  |  | $ | 60.8 |  |  | $ | 194.4 |  |  | $ | 60.8 |
Net Income |  | $ | 3.7 |  |  | $ | 4.2 |  |  | $ | 13.3 |  |  | $ | 4.2 |
The following table summarizes, on a pro forma basis, the combined results of operations of Supreme and MasterBrand as though the acquisition and the related financing had occurred as of December 26, 2022. The pro forma results are not necessarily indicative of either the actual consolidated results had the acquisition of Supreme occurred on December 26, 2022, nor are they indicative of future consolidated operating results.
|  |  | 13 Weeks Ended |  |  |  | 39 Weeks Ended
(U.S. Dollars presented in millions) |  |  |  | September 29, 2024 |  |  |  | September 29, 2024
Net Sales |  |  |  | $ | 718.1 |  |  |  |  | $ | 2,168.7 |
Net Income |  |  |  | $ | 42.0 |  |  |  |  | $ | 118.3 |
These pro forma amounts have been calculated after applying our accounting policies and making certain adjustments, which primarily include: (i) depreciation adjustments relating to fair value step-ups to property, plant and equipment; (ii) amortization adjustments relating to fair value estimates of acquired intangible assets; (iii) incremental interest expense associated with the revolving credit facility used, in part, to fund the acquisition, and related debt issuance costs; (iv) cost of products sold adjustments relating to fair value step-ups to inventory; and (v) transaction related costs of both MasterBrand and Supreme. The Company incurred $15.2 million and $18.7 million of acquisition-related costs in the thirteen and thirty-nine weeks ended September 28, 2025, respectively, and $15.0 million and $19.4 million of acquisition-related costs in the thirteen and thirty-nine weeks ended September 29, 2024, respectively, which are recorded within selling, general and administrative expenses in the condensed consolidated statements of income. The acquisition costs in the thirteen and thirty-nine weeks ended September 28, 2025 primarily related to the costs associated with the acquisition of American Woodmark. The acquisition costs in the thirteen and thirty-nine weeks ended September 29, 2024 related to the costs associated with the acquisition of Supreme.

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