(Reuters) – NCI Building Systems Inc (NCS.N) said a fund managed by Clayton, Dubilier & Rice (CD&R) has agreed to invest $250 million in the company, and that it expects to be profitable in the third quarter, driving its shares up as much as 23 percent.
The company, a maker of metal building components and systems, said the investment will address its significant near-term debt repayment obligations and help reduce its debt by $323 million.
CD&R Fund will make the investment through newly issued convertible participating preferred shares and will have a 72 percent ownership in the company on an as-converted, pro-forma basis, NCI said in a statement.
NCI added that it expects to report a profit and positive cash flow for the third quarter ended Aug 2, helped by its cost reduction programs. It will release its third-quarter results on Sept. 9.
Shares of the company were trading up 22 cents at $4.26 in morning trade Friday on the New York Stock Exchange. They had touched a high of $4.97 earlier in the session. (Reporting by Amulya Nagaraj in Bangalore; Editing by Pradeep Kurup)