Sep. 29, 2009 (PR Newswire) --
HOUSTON, Sept. 29 /PRNewswire-FirstCall/ -- NCI Building Systems, Inc. (NYSE: NCS) today announced that, in conformity with NYSE requirements, NCI is mailing to its stockholders a letter notifying them of its intention to carryout the transactions contemplated by the Investment Agreement (as amended, the "Investment Agreement"), dated as of August 14, 2009, by and between NCI and Clayton, Dubilier & Rice Fund VIII, L.P. ("CD&R"), which was subsequently amended on August 28, 2009 and on August 31, 2009, without seeking stockholder approval.
As previously disclosed, the Investment Agreement contemplates a recapitalization of NCI through a series of transactions, including: (1) a purchase by CD&R, for $250.0 million, of shares of a new class of NCI's preferred stock, par value $1.00 per share, to be designated the Series B Cumulative Convertible Participating Preferred Stock (the "Preferred Stock"); (2) an exchange offer to acquire all $180.0 million in principal amount of NCI's existing 2.125% convertible notes due 2024 (the "Convertible Notes") in exchange for a combination of $500 in cash and 390 in shares of NCI's common stock, par value $0.01 per share (the "Common Stock"), per $1,000 principal amount of Convertible Notes; (3) a partial repayment, and amendment and extension of NCI's existing credit facility; and (4) NCI's entry into a new asset-backed loan facility.
Under the rules of the New York Stock Exchange (the "NYSE"), the issuance of the Preferred Stock to CD&R and of the Common Stock in the exchange offer would normally require approval of the NCI's stockholders. However, the rules of the NYSE contain an exception to the stockholder approval requirement if the "delay involved in securing stockholder approval would seriously jeopardize the financial viability" of the company and if the audit committee of a company's board of directors expressly approves the company's reliance on the exception.
The Audit Committee of the Board of Directors of NCI has determined that delay necessary in securing stockholder approval prior to the issuance of the Preferred Stock to CD&R and of the Common Stock in the exchange offer would seriously jeopardize the financial viability of the Company. Because of that determination, the Audit Committee, pursuant to an exception provided in the NYSE's stockholder approval policy for such a situation, expressly approved the Company's omission to seek the stockholder approval that would otherwise have been required under that policy. The Exchange has accepted the Company's use of the exception.
NCI, in reliance on the exception, is mailing to all stockholders a letter notifying them of its intention to issue (1) the Preferred Stock to CD&R and (2) Common Stock in the exchange offer without seeking stockholder approval. The closing of the transactions is expected to take place as early as October 9, 2009, subject to satisfaction of closing conditions. No assurances can be given that the transactions, or any other transaction contemplated by the Investment Agreement, will be consummated.
