Cornerstone Building Brands Jumps Over 13% on $5.8B Takeover Deal

Exterior building products manufacturer Cornerstone Building Brands, Inc. (NYSE: CNR) has signed an agreement to be acquired by the affiliates of New York-based investment firm Clayton, Dubilier & Rice (CD&R) for around $5.8 billion.

The all-cash transaction includes the assumption of debt. Under the agreement, CD&R’s affiliates will pay $24.65 per share in cash to Cornerstone’s shareholders. The price represents a premium of nearly 16% to the closing price of the CNR stock on March 4.

CD&R currently owns 49% of Cornerstone’s common shares.

The President and CEO of Cornerstone, Rose Lee, said, “We believe this transaction provides substantial value for our shareholders while also accelerating Cornerstone Building Brands’ aspiration to become a premier exterior building solutions company.”

J.L. Zrebiec, Partner at CD&R, said, “We are confident that as a privately held company, with CD&R’s operational and strategic support, Cornerstone Building Brands will be even better positioned in its next phase of growth.”

Following the completion of the acquisition, which is expected in the second or third quarter of this year, Cornerstone will not be listed on any stock exchange.

About Cornerstone

Headquartered in North Carolina, Cornerstone is engaged in the designing, engineering, manufacturing and marketing of external building products for the commercial, residential, and repair & remodel construction industries.

Its product portfolio includes vinyl windows, vinyl siding, stone veneer, metal roofing, metal wall systems and metal accessories.

After the company made the announcement on Monday, CNR stock jumped 13.1% to close at $24.10.

Analysts’ Take

Last week, Barclays (NYSE: BCS) analyst Matthew Bouley maintained a Hold rating on the stock with a price target of $25 (3.7% upside potential).

Additionally, last month, Brent Thielman of DA Davidson downgraded the rating on Cornerstone to Hold from Buy but raised the price target from $23 to $24.65 (2.3% upside potential).

Overall, the stock has a Hold consensus rating based on three Holds. The average CNR price target of $24.83 implies 3% upside potential. Shares have gained 74.3% over the past year.

Investor Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Cornerstone, as almost 32% of investors on TipRanks increased their exposure to the stock over the past 30 days.

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