v3.26.1
Acquisition of American Woodmark
 6 Months Ended
Jun. 28, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition of American Woodmark Acquisition of American Woodmark
Effective as of May 28, 2026 (the “Closing Date”), MasterBrand completed its previously announced transaction with American Woodmark Corporation (the “Closing”). On August 5, 2025, the Company, Maple Merger Sub, Inc. a Virginia corporation and direct, wholly owned subsidiary of the Company (“Merger Sub”), and American Woodmark entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, on the Closing Date, Merger Sub merged with and into American Woodmark (the “Merger”) at the effective time of the Merger (the “Effective Time”), with American Woodmark continuing as the surviving entity. Pursuant to the Merger Agreement, at the Effective Time, each share of American Woodmark common stock outstanding was converted into the right to receive 5.1500 shares of MasterBrand common stock (such ratio, the “Exchange Ratio”) plus cash in lieu of any fractional shares.

As previously reported, on November 3, 2025, MasterBrand entered into an amendment (the “First Amendment”) to its amended and restated credit agreement to obtain incremental term loan commitments in the form of a delayed draw Term A loan (“Term Loan A”) in an aggregate amount equal to $375.0 million, the funding of which was dependent on the Closing of the Merger.

On May 28, 2026, MasterBrand drew down the full $375.0 million available under the Term Loan A. The proceeds from the Term Loan A were used to repay and terminate American Woodmark’s existing indebtedness in an approximate amount of $367.5 million. The remaining proceeds were used for fees and expenses paid in connection with the Merger.

The purchase consideration was $1,059.8 million, which was determined as follows:
Preliminary purchase consideration
Exchange Ratio
5.1500
American Woodmark shares to be acquired as of May 28, 202614,569,868
Number of MasterBrand shares to be issued based on Exchange Ratio75,034,820
Less: Fractional Shares settled in cash163
Whole MasterBrand shares issued75,034,657 
MasterBrand share price at open of trading on May 28, 2026$9.10 
Purchase consideration transferred for American Woodmark shares(a)
$682.8 
Fair value of replacement awards attributable to the purchase consideration(b)
9.5
Settlement of American Woodmark Existing Debt(c)
$367.5 
Total purchase consideration$1,059.8 
(a)    Includes an immaterial cash payment settled for fractional shares.
(b)    The estimated fair value of the replacement equity awards was $19.9 million, of which $9.5 million is attributable to service periods prior to the acquisition and is included in the purchase consideration. The remaining fair value is attributable to $6.0 million of awards that vested shortly after the merger close date based on change of control provisions and were immediately recognized as expense during the thirteen weeks ended June 28, 2026 and $4.4 million of awards that will vest in conjunction with future service and will be amortized over the remaining service period.
(c)    Represents gross settlement of American Woodmark’s Existing Debt as of May 28, 2026.

The purchase consideration of American Woodmark was allocated on a preliminary basis as of the Closing Date. Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable. Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed of American Woodmark are recognized and measured at fair value. The preliminary fair value estimates and assumptions are subject to change as we obtain additional information over the measurement period of up to one year after the Closing Date. The primary areas of the purchase accounting that remain preliminary for completion of the related valuations relate to property, plant and equipment, intangible assets and the related deferred income tax impacts.
The following table sets forth the allocation of the purchase consideration to the assets acquired and liabilities assumed of American Woodmark, with the excess recorded to goodwill:
(U.S. Dollars presented in millions)
Preliminary Net Assets AcquiredFair Value
Cash and cash equivalents$37.2 
Accounts receivable90.9 
Inventories174.4 
Other current assets47.7 
Property, plant and equipment355.6 
Operating lease right-of-use assets106.8 
Other intangible assets356.0 
Other assets61.8 
$1,230.4 
Accounts payable$45.5 
Current operating lease liabilities32.4 
Other current liabilities96.0 
Deferred income taxes112.0 
Operating lease liabilities74.4 
Other non-current liabilities3.1 
$363.4 
Net Assets Acquired$867.0 
Goodwill192.8 
Purchase Consideration$1,059.8 
The estimated value of Property, Plant and Equipment includes adjustments totaling $130.0 million to increase the net book value of $225.6 million to the preliminary fair value estimate of $355.6 million. This estimate is based on other comparable acquisitions and historical experience, and preliminary expectations as to the duration of time we expect to realize benefits from those assets.

The estimated fair values of identifiable real and personal property assets acquired were prepared using the cost and market valuation approaches, in which values are determined by examining recent comparable transactions, market multiples, and publicly traded peer metrics, or estimates the replacement cost to rebuild or replace the service capacity of an asset, accounting for physical or economic obsolescence. The estimated useful lives are based on our historical experience and expectations as to the duration of time we expect to realize benefits from those assets.

We applied significant judgment in determining the fair value of the intangible assets, which involved the use of Level 3 inputs, including estimates and assumptions of forecasted revenue growth rates, estimated earnings, customer attrition rates, assumed royalty rates and market-participant discount rates, as applicable. The estimated fair values of the identifiable intangible assets acquired, their estimated useful lives and the related valuation methodology are as follows:

(U.S. Dollars presented in millions)
Asset TypeFair ValueUseful LifeValuation Methodology
Customer relationships$225.0 17 yearsMulti-period excess earnings
Tradenames131.0 IndefiniteRelief from royalty method
Total other intangible assets$356.0 
The Company recognized $192.8 million of goodwill, of which none is tax deductible. The $192.8 million of goodwill recognized is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and American Woodmark’s assembled workforce.
Net sales and earnings related to the operations of American Woodmark that have been included in our condensed consolidated statements of income for the period from May 28, 2026 to June 28, 2026 are as follows:

(U.S. Dollars presented in millions)
Net Sales $125.5 
Net Loss$(28.9)
Pro forma financial information
The following table summarizes, on a pro forma basis, the combined results of operations of American Woodmark and MasterBrand as though the acquisition and the related financing had occurred as of December 30, 2024, which is the first day of the Company’s fiscal 2025. The pro forma results are not necessarily indicative of either the actual consolidated results had the acquisition of American Woodmark occurred on December 30, 2024, nor are they indicative of future consolidated operating results.
13 Weeks Ended26 Weeks Ended
(U.S. Dollars presented in millions)June 28, 2026June 29, 2025June 28, 2026June 29, 2025
Net Sales $1,041.0 $1,134.2 $1,996.5 $2,202.5 
Net (Loss) Income$(93.8)$41.5 $(157.3)$13.4 
These pro forma amounts have been calculated after applying our accounting policies and making certain adjustments, which primarily include: (i) depreciation adjustments relating to fair value step-ups to property, plant and equipment; (ii) amortization adjustments relating to fair value estimates of acquired intangible assets; (iii) incremental interest expense associated with the Term Loan A used, in part, to fund the acquisition, and related debt issuance costs; (iv) cost of products sold adjustments relating to fair value step-ups to inventory; (v) transaction related costs of both MasterBrand and American Woodmark; and (vi) historical American Woodmark goodwill impairment charges.

The Company incurred $38.4 million and $44.0 million of acquisition-related costs in the thirteen and twenty-six weeks ended June 28, 2026, respectively. Acquisition-related costs included $13.8 million of severance and $6.0 million of stock compensation for both the thirteen and twenty-six weeks ended June 28, 2026, resulting from the acquisition of American Woodmark. The $13.8 million severance liability is recorded in other current liabilities in the condensed consolidated balance sheet as of June 28, 2026. The remaining acquisition-related costs in the thirteen and twenty-six weeks ended June 28, 2026 primarily related to professional fees. The Company incurred $1.9 million and $3.5 million of acquisition-related costs in the thirteen and twenty-six weeks ended June 29, 2025, respectively. The acquisition costs in the thirteen and twenty-six weeks ended June 29, 2025 related to the costs associated with the acquisition of Supreme Cabinetry Brands, Inc. (“Supreme”). Acquisition-related costs for all periods presented are recorded within selling, general and administrative expenses in the condensed consolidated statements of income.