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Highlights

  • James Hardie plans $1.7 billion debt issuance to support AZEK acquisition.

  • Company secures $3.5 billion in new credit facilities from 30 banks.

  • Shares edge 1% higher following funding announcement.

James Hardie Industries (ASX:JHX), one of the world’s leading building products manufacturers, has announced plans to issue up to $1.7 billion in debt as part of the financing strategy for its proposed acquisition of US-based outdoor living products maker, The AZEK Company (NYSE:AZEK).

In a statement to the ASX, James Hardie said the funds will be raised through a private placement of senior secured notes, which may be issued in one or more tranches. The notes will be backed by the same collateral that currently secures James Hardie’s existing first lien obligations under its senior secured credit facilities.

The move comes just a day after the company revealed it had locked in $3.5 billion in new senior secured credit facilities from a consortium of 30 banks. Together with cash on hand and the planned debt issuance, these funds will be used to finance the acquisition of AZEK, as well as to repay and terminate its existing credit arrangements.

Market Reaction Positive

The announcement was met with a mild but positive response from investors, with James Hardie shares rising 1.03% to $36.31 shortly after the market opened.

Contingency Measures in Place

James Hardie also noted that if the acquisition does not proceed as planned, the company would redeem the debt at its original issue price, ensuring no long-term burden remains from the issuance. 

The AZEK Company, which trades on the New York Stock Exchange, specialises in composite decking, railings, and other outdoor living products, offering a complementary fit to James Hardie’s fibre cement and exterior cladding offerings.

The deal is subject to regulatory and shareholder approvals and is expected to close in the coming months, barring any significant hurdles.