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Door Designer Masonite Files for an IPO

Here's another way to get in on the real estate revival


Masonite International, a developer of doors for homes and commercial buildings, has filed for an IPO that could raise as much as $150 million.

The company plans to list on the New York Stock Exchange under the ticker “DOOR,” and lead underwriters include Deutsche Bank (NYSE:DB), Barclays (NYSE:BCS) and Bank of America Merrill Lynch (NYSE:BAC).

Masonite, which got its start back in 1925, has always focused on the higher end. The company currently has products like interior molded residential doors, interior stile and rail residential doors and exterior fiberglass residential doors. Besides its namesake Masonite products, it also features other brands including Marshfield, Premdor, Mohawk, Megantic, Algoma, Baillargeon and Birchwood Best.

Masonite also is only one of two door manufacturers that is vertically integrated, spanning the initial design, development and production. This approach gives the company more control over the quality of its products, as well as the level of service to customers.

Still, Masonite has had a rocky history. A few years after going private in 2005 through a deal led by KKR (NYSE:KKR), the company wound up in bankruptcy — the culprit, no surprise, was the downturn in the real estate market.

Since then, though, the company has enjoyed a reversal in fortunes. Management took swift actions to restructure operations, such as by shutting down 50 manufacturing facilities and reducing its headcount from 15,000 to 9,100. Masonite also invested heavily in new technologies and product development, which has led to the launch of more than 100 new products over the past three years. One example: the “West End Series” of doors that have a European feel as well as a patented hinge-less closing system, which helps to save interior living space.

Masonite’s reach is broad, too, boasting 6,000 customers in 70 countries. Also of note: 18 of its top 20 customers have bought from the company for at least the past 10 years.

In terms of financials, Masonite has shown lots of improvement, too. During the past two years, net sales have gone from $1.4 billion to $1.7 billion and adjusted EBITDA improved from $81 million to $97 million

According to a research report from WDMA/AAMA, the market for the home and commercial market is expected to grow at annual rates of 14% to 10%, respectively, until 2015.

So going forward, it looks like the growth story will continue as — and as long as — the real estate market improves.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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