Why is AZEK combining with James Hardie?

In recent years, we have experienced incredible growth and more than doubled our sales volume, nearly tripled our Adjusted EBITDA, increased brand awareness across our offerings, meaningfully expanded our presence and become an employer of choice.

You have helped us build the company we are today, and we want to keep building for the future. By combining with James Hardie, we are positioning AZEK for the next phase, which will allow us to build upon our proven track record of success to further accelerate business growth, innovation and material conversion and benefit from our world-class talent across the combined company.

James Hardie recognizes what we have accomplished and has great admiration for our brands, team, strong execution and future growth potential.

Combining our industry-leading brands positions us well to sell more products to more people, drive material conversion, and continue to create the best, most innovative products and deliver the best-in-class service to our consumers, contractors and channel partners.

As part of a larger company, we can combine our shared resources to unlock more opportunities for our business, team and partners across the value chain.

Who is James Hardie?

James Hardie is a leading siding brand in North America headquartered in Chicago.

James Hardie was founded in Australia and entered the U.S. over 30 years ago.

Just like AZEK, James Hardie is heavily focused on converting the way the U.S. building industry utilizes traditional materials and operates with a “Homeowner Focused, Customer & Contractor Driven” approach to building demand across the network.

Through this transaction, we are bringing together two well-respected, high-growth and innovative companies to build on our respective successes.

James Hardie has over 5,000 global employees and operates across three business segments – North America Fiber Cement, Asia Pacific Fiber Cement and Europe Building Products.

We encourage you to read more about James Hardie here.

What will happen to AZEK’s overarching strategy and goals? How will James Hardie support those efforts?

Our core strategy centered around material conversion and operational excellence that has contributed to our growth and success in recent years will remain central to our team as a part of James Hardie.

Upon close of the transaction, AZEK will operate as a business within James Hardie’s North American segment.

With James Hardie’s support and additional resources as part of a larger organization, we will continue to accelerate all of our important work and be well positioned to drive sustained above-market growth as a leader in our categories.

James Hardie supports our business and shares our customer-centric philosophy and focus on innovation.

What are James Hardie’s expectations of AZEK and goals for the combined company? How does James Hardie measure success?

James Hardie was attracted to us because of our position, world-class talent and recognized brands. All of these qualities will be applied across our combined company.

As part of James Hardie, we must maintain our R&D and product innovation, effective sales and marketing strategies, operational excellence and commitments to deliver consistent above-market growth.

During the integration planning process, you will learn more about James Hardie’s strategy and business operations.

Will this change my role at AZEK or any of my day-to-day responsibilities? Will our work processes change?

Between now and closing, AZEK continues to operate as a standalone company, and you should not expect to see any changes to your role or responsibilities, or how AZEK operates.

Following close, as we integrate the businesses over time there may be changes to certain operating processes and practices to align with James Hardie’s ways of working.

A joint cross functional integration planning team is being formed and will work closely together to determine how to most effectively bring the businesses together. Should there be any changes in these areas, that will be communicated to you at the appropriate time.

Will there be any changes to my current projects?

Between now and closing, AZEK continues to operate as a standalone company, and there are no changes to any of AZEK’s current projects.

As part of our joint integration planning, we will consider ongoing projects across both organizations and should there be any changes, those will be communicated to specific teams at the appropriate time.

When will the transaction be completed and what will happen between now and then?

We expect to complete the transaction in the second half of calendar year 2025, once we have received the AZEK stockholder approval and the required regulatory approvals.

In the meantime, both companies will continue to operate separately, and it remains business as usual.

Will this change AZEK’s corporate culture?

We are bringing together two companies with a shared focus on innovation and building a better, more sustainable and resilient future.

Safety, collaboration and doing the right thing are top priorities for both companies, along with being reliable partners for our customers.

Just like us, James Hardie’s employees are core to its business and the company is deeply focused on employee development and on providing competitive benefits and numerous programs for career development.

You can read more here.

Will our brand names change?

James Hardie appreciates and recognizes the value of our brands. Bringing together our respective brands is one of the many compelling benefits of the transaction that we expect the combined company to benefit from.

Specific details on brands will be determined as part of our joint integration planning, however no decisions have been made at this time. We will keep you updated as decisions are made.

How will AZEK and our business units fit into the overall organization of James Hardie? When will we know what the new, combined organizational structure will be and if there are any changes to current reporting structures/my current manager?

James Hardie operates across three business segments – North America Fiber Cement, Asia Pacific Fiber Cement and Europe Building Products. Upon close of the transaction, AZEK will operate as a business within James Hardie’s North American segment.

A joint cross functional integration planning team is being formed and will work closely together to determine how to most effectively bring the businesses together.

Additional details regarding the organizational structure post-close will be determined in the coming weeks and months. We will keep our employees updated along the way.

Will the AZEK leadership team remain in place following close?

Following close, Jesse Singh will join the Board of Directors of James Hardie and other key AZEK leaders, including Jon Skelly, will join the combined company.

As with any transaction of this size, there may be select executive management transitions as we become part of James Hardie.

While we do not have a final answer today, we will work closely with James Hardie to ensure this is as seamless as possible for you and all stakeholders. We will update you as we know more.

Until closing, our leadership team will be firmly committed to ensuring the integration is a success.

Will James Hardie keep our current corporate offices in Chicago or will we merge offices with James Hardie’s U.S. HQ in Chicago?

We will maintain our presence in Chicago given our respective headquarters.

Specific details on corporate footprint will be determined as part of our joint integration planning; however, no decisions have been made at this time. We will keep you updated as decisions are made.

Will any plants close as a result of this announcement?

We have complementary manufacturing networks and expect there will be limited – if any – impact to our plant facilities.

But just as importantly, until closing, AZEK remains an independent company and it is business as usual, including at our plants.

Will there be layoffs as a result of this transaction? When will I know if my job is impacted?

We and James Hardie have complementary businesses and geographic operations, and James Hardie values the extensive industry experience of our teams.

As with any transaction like this, there will be some overlap in certain roles.

A joint cross functional integration planning team will carefully evaluate the necessary resources for the combined business and will take the utmost care in making those determinations.

Both AZEK and James Hardie have a shared commitment to timely communications with as much notice as possible as decisions are made during the integration planning process.

Please remember that this announcement is the first step in this process and we are operating as usual.

Will employees be paid severance if they are terminated as a result of the transaction with James Hardie?

Please remember that this announcement is the first step in this process and many decisions still need to be made as we bring the companies together.

We and James Hardie have complementary businesses and geographic operations, and James Hardie values the extensive industry experience of our teams.

We will work closely with the James Hardie team over the coming months to plan for a thoughtful and successful integration.

Decisions that impact our team members are always taken seriously. We will continue to update you as we have information to share.

Anyone who is impacted as a result of the transaction with James Hardie will be eligible for severance and we will support our impacted teams with as many resources as possible.

Will there be any changes to AZEK’s current recruiting efforts?

Between now and closing, AZEK is operating as an independent company and there will be no changes to our recruiting efforts. Should there be any changes between now and closing to specific open roles, your HR team will communicate those.

All of AZEK’s advantages as a workplace remain the same – we are an industry-leading and innovative company, and we are only enhancing our long-term growth potential though this combination with James Hardie.

Should I expect any changes to my compensation, benefits, or other terms of my employment?

Until the transaction closes, there is no change to your compensation structure or benefits, including AZEK’s 401(k) and health plans.

For at least one year after closing, employees who continue on as part of the combined company should expect to see no changes to their current base pay, nor their current target level of incentive compensation.

As integration planning progresses, we will communicate any future changes on a timely basis.

What happens to the AZEK stock I own?

Upon closing, you will receive $26.45 in cash and 1.0340 shares of James Hardie stock for each share of AZEK common stock that you own. AZEK stockholders do not need to take any action at this time. We will be communicating separately with all AZEK stockholders, including employee owners, down the line.

Will there be any impact to AZEK’s OEIP or 2025 annual bonus payments?

There will be no changes to our bonus structure prior to the closing of the transaction, after which James Hardie has agreed to maintain compensation and annual target bonus levels at current levels for one year.

For fiscal 2025, if the closing of the transaction occurs prior to December 1, 2025, then you will receive your annual bonus no later than such date. If the transaction closes after December 1, 2025, bonuses will be paid out at the same time as they have been paid out historically.

What about my AZEK Stock Options?

If you have AZEK Stock Options that have vested, you will receive, for each of your AZEK Stock Options, an amount in cash equal to the aggregate value of the cash and stock paid for each share of AZEK common stock minus the exercise price of your AZEK Stock Option less any applicable tax withholdings when the transaction closes.

If you have AZEK Stock Options that have not vested, when the transaction closes, those will automatically convert into a number of James Hardie Stock Options with an exercise price that preserves the spread value of the AZEK Stock Options.

What about my AZEK restricted stock units (RSUs) and performance stock units (PSUs)?

If you have AZEK RSUs and/or PSUs that have not vested, those will automatically convert into James Hardie RSUs and a cash award with a combined value equivalent to that of your AZEK RSUs and/or PSUs when the transaction closes.

Performance for PSUs will be based on (i) for FY 2024 and 2025, actual performance, (ii) for FY 2026, if the performance period is more than half-complete at the time of closing, the greater of target and actual performance, otherwise, at target performance, and (iii) for FY 2027, target performance.

The James Hardie RSUs and cash award will vest on the same schedule as your current AZEK RSUs and PSUs.

What will happen to the Employee Stock Purchase Plan (ESPP)?

The current ESPP offering period terminate.

There will be no future offering periods and the ESPP will terminate immediately prior to closing.

All shares purchased through the ESPP will be exchanged for the same amount of cash and stock as all other AZEK shares.

Will there be any changes to my work schedule or overtime opportunities?

It is business as usual at AZEK and until we close the transaction there are no changes to any work schedules.

Even after the transaction closes, we expect there will be limited impact to our plant facilities and as a result, your work schedule and overtime opportunities will likely remain the same following close.

Both AZEK and James Hardie have a shared commitment to timely communications and we will share any future changes with as much notice as possible.

Are there changes to my pay schedule?

We expect limited impact to our plant/manufacturing operations and as such, we do not expect immediate changes to our payroll processes post-close.

Payroll processing is a topic that will be addressed as part of our joint integration planning with James Hardie.

Both AZEK and James Hardie have a shared commitment to timely communications, and we will share any future changes with as much notice as possible.

Please remember that this announcement is the first step in this process, and we expect to close the transaction in the second half of calendar year 2025. Until then, AZEK remains an independent company and it is business as usual, including with respect to how and when employees are paid.

Will there be any changes to AZEK’s community giving programs?

This is one of the many items that will be determined as part of our joint integration planning.

We are incredibly proud of the social impact work that we do to support our communities and causes that are important to our employees.

This is a commitment James Hardie shares, which you can read about here.

Am I allowed to contact my counterpart at James Hardie?

No. We have strict guidelines and legal requirements prior to closing, and you should not engage with James Hardie employees unless a member of AZEK’s leadership team asks you to do so.

Our two companies will continue to operate independently until the close of the transaction. It is business as usual.

In the coming weeks, we will establish a joint cross functional team to facilitate a successful integration.

If I see a position posted at James Hardie I’d like to apply for, what should I do?

Until the transaction closes, which we expect to occur in the second half of calendar year 2025, we are continuing to operate as a standalone company. This means there is no change to your job.

The joint cross functional integration planning team will carefully evaluate the necessary resources for the combined business and will take the utmost care in making those determinations.

Should your job be impacted by the transaction, we will assist you through that process and provide as much support as possible, including finding ways to apply for a different job within James Hardie.

Will the transaction affect our relationships with customers, distributors and suppliers?

As we continue to grow and innovate as a combined company, we will have access to more resources to accelerate our growth opportunities and better serve our customers.

We will continue to provide our customers with excellent service and high-quality products.

We expect a seamless transition for all of our stakeholders and should there be any process changes following close, those will be communicated to our customers, distributors and suppliers on a timely basis.

Will there be any changes to how we market AZEK products?

James Hardie appreciates the value of our brands, and we expect to continue marketing our products under our existing recognized brands.

Will our sales team have the opportunity to sell James Hardie’s products to our customers/distributors and vice versa?

Yes, following the close of the transaction. This is one of the many exciting benefits of the transaction that we will be able to pursue following close.

The consumer journeys for siding and decking often overlap and by uniting our two highly complementary companies, we will be able to sell a broader range of innovative outdoor living and exteriors products to more customers across new construction and the R&Rs.

But we are operating business as usual for the time being and nothing has changed at this time.

Please remember that this announcement is the first step in this process and we expect to close the transaction in the second half of calendar year 2025. Until then, AZEK remains an independent company.

Will there be any changes to our pricing or current contracts with customers, distributors or suppliers?

We expect a seamless transition for customers, distributors and suppliers, including with respect to ongoing engagements.

We are just beginning joint integration planning with James Hardie and these are details that will be discussed and finalized as we work toward closing.

What should I tell customers/distribution partners if they ask about this transaction?

First and foremost, please note in any conversations that until the transaction closes, which won’t occur for many months, AZEK remains an independent company and there are no changes to our offerings, pricing or current contracts because of today’s announcement.

When discussing any benefits of the transaction, you should highlight that it will provide an exciting opportunity to provide them with a broader range of innovative outdoor living and exteriors products across siding, exterior trim, decking, railing and pergolas.

Who can I contact if I have more questions?

If you have additional questions, please contact your manager.

As always, we will provide updates on the process as we have news to share.

What do I do if I am contacted by an outside third party such as members of the media or investors?

Consistent with our usual practice, if you receive outside inquiries from the media or investors please do not respond. Outside inquiries should be referred to:

Media: Amanda Cimaglia, Amanda.Cimaglia@azekco.com

Investors: Eric Robinson, Eric.Robinson@azekco.com