Buyout-Backed Busts: Masonite

#5. Masonite International

KKR purchased the Canadian door maker in 2005 for $2.5 billion. The firm invested $551.5 million in equity from KKR Millennium Fund.

What Went Wrong?
The slide in housing and construction hurt the company’s ability to service payments on its TK million in debt. The deal had covenants and a relatively standard 20% equity check, but at of early 2008 the company was leveraged 6.71x. Last fall the company went into default on a $42 million interest payment to its $768.9 million senior sub notes due 2015. KKR even purchased a 5% stake in the company’s bank debt. The company filed for bankruptcy on March 16, 2009.

The Aftermath
KKR’s equity stake was wiped out. Masonite emerged from bankruptcy June 9.

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