AZEK secures $815 million credit facility

CHICAGO - The AZEK Company Inc. (NYSE: AZEK), a leader in designing and manufacturing sustainable outdoor living products, has successfully entered into a new credit agreement with Wells Fargo Bank and other financial institutions. The deal, orchestrated by Wells Fargo Securities, LLC and JPMorgan Chase (NYSE:JPM) Bank, N.A. as joint bookrunners, provides AZEK with a substantial $815 million credit facility. This facility is comprised of a $440 million first lien term loan and a $375 million first lien revolving credit facility.

The company announced on Monday that the proceeds from this new agreement would be used to refinance existing debts under its previous credit agreements, which have now been terminated. This refinancing effort is expected to reduce AZEK's funded debt by approximately $150 million, lower interest rates, and enhance the company's financial flexibility.

Peter Clifford, AZEK's Chief Operations Officer and Chief Financial Officer, expressed satisfaction with the refinancing outcome, stating that the favorable terms reflect market confidence in the company's growth strategy and progress. Clifford emphasized that with a stronger financial position and robust free cash flow generation, AZEK is poised to invest further in growth opportunities and expand its market share.

The AZEK Company is renowned for its commitment to sustainability, with products made from up to 85% recycled materials. They are a recognized market leader in innovation, quality, and aesthetics, as well as sustainability, offering eco-friendly alternatives to traditional wood exteriors. Headquartered in Chicago, AZEK operates manufacturing and recycling facilities across the United States and has been acknowledged for its climate leadership and workplace environment.

This news is based on a press release statement. The company cautions that forward-looking statements contained in the release are subject to risks and uncertainties, and actual future events may differ materially. These statements are not guarantees of future performance, and undue reliance should not be placed on them.

The AZEK Company's stock is publicly traded on the New York Stock Exchange under the ticker symbol AZEK.

In other recent news, Azek Co. continues to show robust performance despite market uncertainties. The company recently surpassed its third-quarter sales growth guidance of 4-8% with an actual growth of 18%. This led to an increase in its total sales guidance for fiscal year 2024, now expecting $1.42-1.44 billion. Additionally, Azek raised its adjusted EBITDA guidance for the same fiscal year to $370-380 million.

Stifel maintains a Buy rating on Azek shares with a $50 target, while JPMorgan, BMO Capital, and RBC Capital have adjusted their price targets. Despite these adjustments, JPMorgan maintains an Overweight rating, RBC Capital an Outperform rating, and BMO Capital a Market Perform stance. These ratings are based on the company's strong performance and strategic initiatives, which are expected to drive continued growth and margin improvement.

Azek has also entered into a $50 million accelerated share repurchase agreement with JPMorgan Chase Bank. This strategic financial move is part of Azek's broader commitment to sustainability and innovation in the outdoor living space. These are the recent developments for Azek, which continues to exhibit strong business fundamentals despite some market uncertainties.

InvestingPro Insights

The AZEK Company's recent refinancing move aligns well with its strong financial performance and market position. According to InvestingPro data, AZEK boasts a market capitalization of $6.66 billion, reflecting its significant presence in the outdoor living products industry. The company's revenue growth of 15.23% over the last twelve months demonstrates its ability to expand its market share, as highlighted in the article.

InvestingPro Tips reveal that AZEK operates with a moderate level of debt, which is consistent with the company's recent efforts to refinance and reduce its funded debt by approximately $150 million. This strategic move is likely to further strengthen AZEK's financial position and support its growth initiatives.

The company's profitability is also noteworthy, with an EBITDA of $356.88 million over the last twelve months and a robust EBITDA growth of 85.1%. This strong financial performance underscores Peter Clifford's statement about AZEK's ability to generate robust free cash flow and invest in growth opportunities.

Investors should note that AZEK is trading at a high earnings multiple, with a P/E ratio of 41.13. While this may indicate high growth expectations, it's important to consider that 17 analysts have revised their earnings downwards for the upcoming period, according to InvestingPro Tips.

For those interested in a more comprehensive analysis, InvestingPro offers 12 additional tips for AZEK, providing deeper insights into the company's financial health and market position.

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