Patrick Industries and LCI Industries agreed to combine in an all-stock merger that would create a company with about $8.1 billion in trailing-12-month revenue, $1.0 billion in adjusted EBITDA and $508 million in free cash flow, all including estimated synergies.
Under the deal, LCI shareholders will receive 1.2440 shares of Patrick common stock for each LCI share. After closing, Patrick shareholders are expected to own about 52% of the combined company, while LCI shareholders will own about 48%.
The companies said the merger is expected to generate more than $150 million in annual run-rate cost synergies within three years of closing. The savings are expected to come mainly from procurement, SG&A efficiencies, engineering practices and supply chain management.
The combined company is expected to have pro forma net leverage of 2.1x, with a stated target range of 2.25x to 2.5x for long-term capital allocation. It will also have a balance sheet that the companies said supports continued investment, share repurchases and dividends.
Patrick CEO Andy Nemeth will lead the combined company. Patrick director Todd Cleveland will serve as chair, and LCI interim CEO Johnny Sirpilla will serve as vice chair. The board will have 12 directors, split evenly between the two companies.
The combined company will be headquartered in Elkhart, Indiana, and the deal is expected to close in the first half of 2027. Today the company's shares have moved 1.4% to a price of $101.525. Check out the company's full 8-K submission here.
