JELD-WEN Holding, Inc. announced that, in compliance with the court-ordered divestiture of its Towanda, Pennsylvania business and related assets, JELD-WEN has entered into an asset purchase agreement for the sale of Towanda to Woodgrain Inc. for approximately $115 million, subject to certain adjustments and closing conditions.
What the CEO says
"After many years of working through the court-ordered divestiture of Towanda, we have now reached an important inflection point in this process. We continue to evaluate our options in this unprecedented legal proceeding, but following a thorough review, we have concluded that it is in the best interest of the Company and its stakeholders to proceed with closing the transaction at this time. Regardless, JELD-WEN is well positioned to continue to service and supply its door customers at the high level they have come to expect from us," says Chief Executive Officer William J. Christensen.
"While we are disappointed with the court ruling, we remain fully committed to advancing our transformation efforts to solidify our strong and resilient foundation. We will persist in investing in our business, focusing on initiatives that drive both cost reductions and sustainable growth," adds Christensen. "Through this transformation, we see significant opportunities for self-driven improvements that will enhance our operations and position us for long-term success. I am confident that JELD-WEN has a bright future ahead, and we are dedicated to taking the necessary steps to unlock our full potential."
More details
Given the uncertainty around volumes related to the assignment of customer contracts and our obligations within transition services and supply agreements, the precise future financial impact to JELD-WEN is unclear. However, based on management's best estimates at this time, the company believes that the sale of Towanda would result in an annual reduction of approximately $150 million to $200 million of revenue and approximately $25 million to $50 million of EBITDA during the twelve months following the closing of the divestiture. We expect a non-cash pre-tax impairment charge of approximately $25 million to $35 million and expect the divestiture to be approximately neutral to net debt leverage.
Under the court-ordered asset purchase agreement, the sale of Towanda is currently expected to close as early as December 31, 2024.
