Masco Announces Strategic Initiatives to Drive Shareholder Value: Company to Spin-Off Installation and Other Services Segment, Initiate Significant Share Repurchase Program and Reduce Corporate Expense (9/30/14)
TAYLOR, Mich., Sept. 30, 2014 /PRNewswire/ -- Masco Corporation (NYSE: MAS) today announced its Board of Directors has approved the strategic initiatives recommended by management under the leadership of Keith Allman, its President and Chief Executive Officer.
The strategic initiatives, which are designed to drive shareholder value over the mid- to long-term, are comprised of:
•The spin-off of 100 percent of Masco's Installation and Other Services businesses ("Services Business") into an independent, publicly-traded company through a tax-free stock distribution to Masco's shareholders
•The implementation of a share repurchase program for an aggregate of 50 million shares of Masco's common stock
•The reduction of corporate expense and simplification of Masco's organizational structure, resulting in an estimated charge of approximately $30 million over the next several quarters with anticipated company-wide annual savings of $35-40 million
Mr. Allman stated, "Today's transformative actions reflect our continued commitment to enhance shareholder value through the active management of our portfolio, effective capital allocation, cost control, and organizational focus. As separate companies, both Masco and the Services Business will have greater flexibility to focus on and pursue their respective growth strategies. In addition, the actions we are taking at the corporate office are intended to improve our cost position and drive value across our enterprise. Masco remains committed to creating shareholder value by profitably growing in branded building products."
Mr. Allman continued, "Over the past several years, Masco has strengthened the Services Business by reducing fixed costs and implementing lean processes to achieve supply chain savings. As such, we believe the Services Business is now properly positioned to operate as a separate company. The Services Business will focus on growth by capitalizing on North American new home construction as well as further expanding into commercial and retrofit categories. Masco shareholders stand to benefit from the additional value created by the spin-off."
Masco is pleased to announce the Service Business management team:
•Jerry Volas, currently Masco Group President, will become the Chief Executive Officer
•Robert Buck, currently Masco Contractor Services' President, will become the President and Chief Operating Officer
•John Peterson, currently Masco Contractor Services' Chief Financial Officer, will become the Chief Financial Officer
All three have extensive industry experience and have been instrumental in positioning the Services Business for growth and profitability.
Masco also announced today that its Board has approved the repurchase of an aggregate of 50 million shares of the Company's common stock, which represents approximately 14 percent of Masco's currently outstanding shares. Repurchases are expected to be made over a multi-year period beginning in 2014. The repurchases will be funded through cash on hand and operating cash flow. As of June 30, 2014, cash on hand was $1.4 billion.
Mr. Allman added, "This authorization reflects the Board's continued confidence in Masco's future performance, our ability to generate long-term cash flow, the strength of Masco's liquidity, and our ongoing commitment to create shareholder value."
The Company will hold an investor day on February 9, 2015 in New York at which time it will discuss its outlook for 2015 and the long-term growth strategy for each of its businesses.
Masco
Following the separation, Masco will continue to be listed on the NYSE under "MAS," and will remain headquartered in Taylor, Michigan. Masco will continue to build on its leading positions in branded building products.
New Services Business
Masco's Installation and Other Services segment, which includes Masco Contractor Services, the leading installer of insulation in the U.S., and Service Partners, a leading distributor of residential insulation products and related accessories in the U.S., reported revenue of $1.4 billion in 2013. This segment is comprised of 190 branch locations and 70 distribution centers and its revenue has achieved a compounded annual growth rate of nearly 11 percent since 2010. The Services Business will be headquartered in Central Florida.
Next Steps
The proposed separation is subject to customary conditions, including receipt of any required regulatory approvals, an opinion of counsel regarding the tax-free nature of the separation, the effectiveness of a Form 10 filing with the Securities and Exchange Commission, and final approval by Masco's Board of Directors. Masco expects to complete the separation by mid- 2015.
Conference Call Details
A conference call regarding items contained in this release is scheduled for Tuesday, September 30, 2014 at 8:30 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (855) 226-2726 (855-22MASCO) or (706) 679-3614 from outside the U.S. Please use the conference identification number 12689434. The conference call will be webcast simultaneously and in its entirety through the Company's website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on the Company's website.
A replay of the call will be available on Masco's website or by phone by dialing (855) 859-2056 or (404) 537-3406 from outside the U.S. Please use the conference identification number 12689434. The telephone replay will be available approximately two hours after the end of the call and continue through October 31, 2014.
About Masco
Headquartered in Taylor, Michigan, Masco Corporation is one of the world's leading manufacturers of branded building products, as well as a leading provider of services that include the installation of insulation and other building products.
Supplemental material, including a presentation in PDF format, is available on the Company's website at www.masco.com.
Masco Corporation Approves Spin-off of TopBuild Corp. (6/08/15)
Record Date June 19, 2015
TAYLOR, Mich.--(BUSINESS WIRE)--Masco Corporation (NYSE:MAS) today announced that its Board of Directors has approved the previously-announced spin-off of TopBuild Corp. (NYSE:BLD), which will, upon completion of the spin-off, hold the assets and operations of Masco’s Installation and Other Services businesses.
In the spin-off, Masco will distribute 100% of the shares of common stock of TopBuild. The distribution of TopBuild shares is expected to be completed after the New York Stock Exchange market closing on June 30, 2015, with Masco stockholders receiving one share of TopBuild common stock for every nine shares of Masco common stock held at the close of business on the record date of June 19, 2015. Following the distribution of TopBuild common stock, TopBuild will be an independent, publicly-traded company. TopBuild has received approval for the listing of its common stock on the New York Stock Exchange under the symbol "BLD."
Keith Allman, Masco’s President and Chief Executive Officer stated, “Last fall, we announced our plan to spin off TopBuild as part of our strategic initiatives to enhance shareholder value. Under the leadership of Jerry Volas as its Chief Executive Officer, I am confident that TopBuild is well positioned to operate as an independent public company. Following the spin-off, both TopBuild and Masco will have greater flexibility to focus on and pursue their respective growth strategies. For Masco, this is our ongoing commitment to create shareholder value by profitably growing in branded building products.”
Masco stockholders who hold their shares through a brokerage account will receive a credit to their brokerage account reflecting their ownership of TopBuild common stock. Masco stockholders who hold their shares in certificated form will receive a book-entry account statement reflecting their ownership of TopBuild common stock and should retain their Masco stock certificates. Fractional shares of TopBuild common stock will not be distributed. Any fractional share of TopBuild common stock otherwise issuable to a Masco stockholder will be sold in the open market on such stockholder's behalf, and such stockholder will receive a cash payment for the fractional share based on the stockholder’s pro rata portion of the net cash proceeds from sales of all fractional shares.
Masco will furnish an information statement to all stockholders entitled to receive the distribution of shares of TopBuild common stock. The information statement describes TopBuild and other details regarding the spin-off. The information statement is included as an exhibit to TopBuild's Registration Statement on Form 10, which it has filed with the Securities and Exchange Commission (SEC) and is available at the SEC's website at www.sec.gov.
The completion of the distribution is subject to satisfaction of a number of customary conditions, including the SEC having declared effective TopBuild's Registration Statement on Form 10.
Masco expects to receive an opinion from its special tax counsel, Davis Polk & Wardwell LLP, confirming the tax-free status of the spin-off to Masco and its stockholders (except to the extent of cash received in lieu of fractional shares).
Masco expects that a "when-issued" public trading market for TopBuild common stock will commence on or about June 17, 2015 under the symbol “BLD WI”, and will continue through the distribution date. Masco also anticipates that "regular way" trading of TopBuild common stock will begin on July 1, 2015, the first trading day following the distribution date.
Masco expects that, beginning on or about June 17, 2015, and through the distribution date, there will be two ways to trade Masco common stock – either with or without the distribution of TopBuild common stock. Masco stockholders who sell their shares of Masco common stock in the "regular-way" market (that is, the normal trading market on the NYSE under the symbol "MAS") after the June 19 record date and on or prior to the June 30 distribution date will be selling their right to receive shares of TopBuild common stock in connection with the spin-off. Masco also expects that shares of Masco common stock will trade ex-distribution (that is, without the right to receive the TopBuild distribution) during this period under the symbol "MAS WI." Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling shares of Masco common stock on or before the distribution date.
Greenhill & Co., LLC and J.P. Morgan Securities LLC acted as financial advisors to Masco regarding the spin-off.
About Masco
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of home improvement and building products.
About TopBuild
TopBuild installs insulation and other building products nationwide through its TruTeam Contractor Services business, which has over 190 installation branches located in 43 states. TopBuild distributes insulation and other building products nationwide through its Service Partners business from its 72 distribution centers located in 35 states. TopBuild is based in Daytona Beach, Florida.
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