James Hardie Industries (ASX:JHX) Announces Acquisition of AZEK
Transaction Overview
James Hardie Industries plc (ASX:JHX) has proposed a combination of stock and cash to acquire The AZEK Company Inc. AZEK shareholders will receive $26.45 in cash and 1.0340 ordinary shares of James Hardie for each AZEK share, equivalent to a total per share value of $56.88, representing a 26% premium over AZEK’s recent trading prices ( and a 21% premium to AZEK’s VWAP over the 60 trading days prior to March 21, 2025). Upon completion, James Hardie and AZEK shareholders are expected to own approximately 74% and 26% of the combined company, respectively.
Financial Benefits and Synergies
The acquisition is projected to deliver significant financial benefits, including accelerated growth with a combined net sales of $5.9 billion and adjusted EBITDA of $1.8 billion, reflecting a 31% margin. The combined entity expects to achieve over $1 billion in annual free cash flow, supported by substantial cost synergies and commercial synergies.
Growth Platform and Market Position
The merger aims to create a leading growth platform in the building products sector, combining James Hardie’s expertise in fiber cement exteriors with AZEK’s leadership in outdoor living products such as decking and railing. The combined company will provide comprehensive solutions with leading exterior brands, targeting both repair & remodel and new construction markets.
Transaction Timing and Approvals
The proposed acquisition has been unanimously approved by the boards of both companies and is anticipated to close in the second half of 2025, subject to customary conditions, regulatory approvals, and AZEK shareholder approval. James Hardie has secured fully committed financing for the transaction from Bank of America and Jefferies LLC.
Integration and Value Creation
A disciplined integration planning process will be implemented to realize the projected synergies by 2028. The combined company will maintain its current ASX listing and seek broader index inclusion in the U.S. through the NYSE listing. Leadership will consist of James Hardie’s CEO Aaron Erter and CFO Rachel Wilson, with additional board members joining post-merger.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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