Griffon Corporation to Acquire ClosetMaid® and Explore Strategic Alternatives for Clopay Plastic Products

NEW YORK–(BUSINESS WIRE)–Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF) has entered
into a definitive agreement to acquire ClosetMaid Corporation
(“ClosetMaid”), a market leader of home storage and organization
products, from Emerson (NYSE:EMR) for $260 million. After taking into
account tax benefits resulting from the transaction, the effective
purchase price is $225 million.

“We are proud to add ClosetMaid to our family of iconic brands including
AMES, True Temper, and Clopay,” said Ronald J. Kramer, Griffon’s Chief
Executive Officer. “ClosetMaid complements and diversifies our portfolio
of leading consumer brands and products. This acquisition expands our
existing footprint in home centers and expands our customer
relationships to include the direct to builder and mass merchant,
specialty and hardware channels. ClosetMaid’s industry-leading closet
organization, home storage, and garage storage products make it a
terrific addition to Griffon’s Home and Building Products segment.”

The acquisition is expected to be financed through cash on hand,
availability on our revolving credit facility, and/or through committed
debt financing which is expected to be in the form of a senior notes
offering. The acquisition is subject to customary closing conditions and
is expected to close by the end of September 2017.

Griffon and Emerson will make a joint election under Section 338(h)(10)
of the Internal Revenue Code, permitting the transaction to be treated
as an asset purchase for tax purposes. This election will generate a tax
benefit with an estimated present value of $35 million for Griffon and
its shareholders.

The acquisition of ClosetMaid will be immediately accretive to cash flow
and earnings. In the first full year of operations, Griffon expects
ClosetMaid to contribute $300 to $315 million in revenue and between
$0.08 and $0.10 in earnings per share. Griffon’s effective purchase
price is approximately 7.1 to 7.5 times expected EBITDA for the fiscal
year ending September 2018.

Separately, Griffon announced that after having received from qualified
parties unsolicited inquiries to acquire Clopay Plastic Products Company
(“Clopay Plastics”), Griffon will explore strategic alternatives for
Clopay Plastics. A global leader in the development and production of
specialty plastic films for hygienic, health-care and industrial
products, Clopay Plastics has operations in North America, Brazil, and
Germany. During the trailing 12-month period ending June 30, 2017,
Clopay Plastics generated $468 million of revenue and $53 million of
Segment adjusted EBITDA.

“Clopay Plastics is a well-recognized, trusted provider of specialty
plastic films. It has an 83-year legacy of innovation and technical
leadership, a state-of-the-art manufacturing base with global reach,
outstanding personnel, and long-term relationships with blue-chip
customers,” said Mr. Kramer. “Given the unique aspects of the Clopay
Plastics business, Griffon is evaluating approaches to increase
long-term value for our shareholders while providing enhanced
opportunities for growth and value creation for Clopay Plastics and its

Goldman, Sachs & Co. LLC is acting as financial advisor to Griffon for
its acquisition of ClosetMaid from Emerson, and will assist the company
with exploring strategic alternatives for Clopay Plastics. Deutsche Bank
has provided committed financing for the acquisition of ClosetMaid.
Dechert is acting as Griffon’s legal counsel for both the acquisition of
ClosetMaid and the potential strategic actions with Clopay Plastics.

Conference Call Information

The Company will hold a conference call Wednesday, September 6, 2017 at
8:30 AM EDT to discuss the acquisition of ClosetMaid and exploring
strategic options for Clopay Plastics. The Company has also provided
supplemental materials related to the transaction, which can be accessed
in the investor relations section of the Company’s website in the
“Company Presentations” section.

The call can be accessed by dialing 1-800-946-0706 (U.S. participants)
or 1-719-325-4786 (International participants). Callers should ask to be
connected to the Griffon Corporation teleconference or provide
conference ID number 7929272.

A replay of the call will be available starting on Wednesday, September
6, 2017 at 11:30 AM ET by dialing 1-844-512-2921 (U.S.) or
1-412-317-6671 (International), and entering the conference ID number:
7929272. The replay will be available through Wednesday, September 20,
2017 at 11:59 PM ET.

Forward-looking Statements

“Safe Harbor” Statements under the Private Securities Litigation Reform
Act of 1995: All statements related to, among other things, income
(loss), earnings, cash flows, revenue, changes in operations, operating
improvements, industries in which Griffon operates and the United States
and global economies that are not historical are hereby identified as
“forward-looking statements” and may be indicated by words or phrases
such as “anticipates,” “supports,” “plans,” “projects,” “expects,”
“believes,” “should,” “would,” “could,” “hope,” “forecast,” “management
is of the opinion,” “may,” “will,” “estimates,” “intends,” “explores,”
“opportunities,” the negative of these expressions, use of the future
tense and similar words or phrases. Such forward-looking statements are
subject to inherent risks and uncertainties that could cause actual
results to differ materially from those expressed in any forward-looking
statements. These risks and uncertainties include, among others: current
economic conditions and uncertainties in the housing, credit and capital
markets; the Griffon’s ability to achieve expected savings from cost
control, integration and disposal initiatives; the ability to identify
and successfully consummate and integrate value-adding acquisition
opportunities; increasing competition and pricing pressures in the
markets served by Griffon’s operating companies; the ability of
Griffon’s operating companies to expand into new geographic and product
markets, and to anticipate and meet customer demands for new products
and product enhancements and innovations; reduced military spending by
the government on projects for which Griffon’s Telephonics Corporation
supplies products, including as a result of defense budget cuts and
other government actions; the ability of the federal government to fund
and conduct its operations; increases in the cost of raw materials such
as resin, wood and steel; changes in customer demand or loss of a
material customer at one of Griffon’s operating companies; the potential
impact of seasonal variations and uncertain weather patterns on certain
of Griffon’s businesses; political events that could impact the
worldwide economy; a downgrade in the Griffon’s credit ratings; changes
in international economic conditions including interest rate and
currency exchange fluctuations; the reliance by certain of Griffon’s
businesses on particular third party suppliers and manufacturers to meet
customer demands; the relative mix of products and services offered by
Griffon’s businesses, which could impact margins and operating
efficiencies; short-term capacity constraints or prolonged excess
capacity; unforeseen developments in contingencies, such as litigation
and environmental matters; unfavorable results of government agency
contract audits of Telephonics Corporation; Griffon’s ability to
adequately protect and maintain the validity of patent and other
intellectual property rights; the cyclical nature of the businesses of
certain Griffon’s operating companies; and possible terrorist threats
and actions and their impact on the global economy. Such statements
reflect the views of the Company with respect to future events and are
subject to these and other risks, as previously disclosed in the
Company’s Securities and Exchange Commission filings. Readers are
cautioned not to place undue reliance on these forward-looking
statements. These forward-looking statements speak only as of the date
made. Griffon undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.

About Griffon Corporation

Griffon is a diversified management and holding company that conducts
business through wholly-owned subsidiaries. Griffon oversees the
operations of its subsidiaries, allocates resources among them and
manages their capital structures. Griffon provides direction and
assistance to its subsidiaries in connection with acquisition and growth
opportunities as well as in connection with divestitures. In order to
further diversify, Griffon also seeks out, evaluates and, when
appropriate, will acquire additional businesses that offer potentially
attractive returns on capital.

Headquartered in New York, N.Y., the Company was founded in 1959 and is
incorporated in Delaware. Griffon is listed on the New York Stock
Exchanges and trades under the symbol GFF.

Griffon currently conducts its operations through three reportable

  • Home & Building Products consists of two companies, The AMES
    Companies, Inc. (“AMES”) and Clopay Building Products Company, Inc.

    • AMES, founded in 1774, is the leading U.S. manufacturer and a
      global provider of long-handled tools and landscaping products for
      homeowners and professionals.
    • CBP, since 1964, is a leading manufacturer and marketer of
      residential and commercial garage doors and sells to professional
      dealers and some of the largest home center retail chains in North
  • Telephonics Corporation, founded in 1933, is recognized globally as a
    leading provider of highly sophisticated intelligence, surveillance
    and communications solutions for defense, aerospace and commercial
  • Clopay Plastic Products Company, Inc., incorporated in 1934, is a
    global leader in the development and production of embossed, laminated
    and printed specialty plastic films for hygienic, health-care and
    industrial products and sells to some of the world’s largest consumer
    products companies.

For more information on Griffon and its operating subsidiaries, please
see the Company’s website at

Griffon evaluates performance and allocates resources based on each
segment’s operating results before interest income and expense, income
taxes, depreciation and amortization, unallocated amounts (mainly
corporate overhead), restructuring charges, loss on debt extinguishment
and acquisition related expenses, as well as other items that may affect
comparability, as applicable (“Segment adjusted EBITDA”, a non-GAAP
measure). Griffon believes this information is useful to investors for
the same reason.

The following table provides a reconciliation of Revenue and Segment
adjusted EBITDA for PPC for the trailing twelve months ended June 30,
2017 and is derived from our audited financial statements on form 10-K
for the year ended September 30, 2016, adding our financial statements
filed on Form 10-Q for the nine months ended June 30, 2017 and
subtracting our financial statements filed on Form 10-Q for the nine
months ended June 30, 2016:




(in thousands)


Trailing Twelve
For the Year Ended For the Nine Months Ended Months Ended
September 30, 2016     June 30, 2017   June 30, 2016     June 30, 2017
Revenue $ 480,126 $ 341,986 $ 353,786 $ 468,326
Segment Operating Profit $ 20,313 $ 19,628 $ 13,569 $ 26,372
Depreciation and amortization 23,866 20,024 17,685 26,205
Restructuring Charges   5,900     5,900  
Segment Adjusted EBITDA $ 50,079 $ 39,652 $ 37,154 $ 52,577


Griffon Corporation
Brian G. Harris
SVP & Chief Financial

ICR Inc.
Michael Callahan
Senior Vice