Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
Indicate by check mark whether the registrant
is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Supplemental Disclosures
to Proxy Statement
This supplemental information
to the Proxy Statement should be read in conjunction with the Proxy Statement, which should be read in its entirety. All page references
in the information below are to pages in the Proxy Statement, and all terms used but not defined below shall have the meanings set forth
in the Proxy Statement. To the extent the following information differs from or conflicts with the information contained in the Proxy
Statement, the information set forth below shall be deemed to supersede the respective information in the Proxy Statement.
The disclosure under the subsection
captioned “Special Factors—Background of the Merger” is hereby amended and supplemented by adding to the third full
paragraph on page 17 of the Proxy Statement, the following (with new text underlined):
On November 12, 2021, Messrs. Sleeper and Zrebiec spoke
by telephone with representatives of Centerview to communicate that, if invited by the Special Committee, CD&R would be prepared to
consider exploring a potential transaction at an indicative valuation of $22.00 per share of Company common stock, which represented
a per share premium of approximately 29% above the closing price of the shares of Company common stock as of November 12, 2021. During
this conversation, Messrs. Sleeper and Zrebiec reiterated that CD&R was not interested in selling or reducing its investment in the
Company. In addition, CD&R requested permission to begin to engage with up to two potential sources of debt financing, noting that
such engagement would provide greater certainty as to CD&R’s ability to finance any potential transaction.
The disclosure under the subsection
captioned “Special Factors—Background of the Merger” is hereby amended and supplemented by adding to the second full
paragraph on page 18 of the Proxy Statement, the following (with new text underlined):
On November 22, 2021, Messrs. Sleeper
and Zrebiec spoke by telephone with representatives of Centerview to communicate that, if invited by the Special Committee, CD&R would
be prepared to consider exploring a potential transaction at an indicative valuation of $23.00 per share of Company common stock, which
represented a per share premium of approximately 33% above the closing price of the shares of Company common stock as of November 22,
2021. Messrs. Sleeper and Zrebiec noted that the increased indicative valuation was informed by discussions between CD&R and two
potential sources of debt financing, and that CD&R believed it would have limited room to increase the indicative valuation above
$23.00 per share.
The disclosure under the subsection
captioned “Special Factors—Background of the Merger” is hereby amended and supplemented by adding to the first full
paragraph on page 19 of the Proxy Statement, the following (with new text underlined):
On December 22, 2021, Messrs. Sleeper
and Zrebiec spoke by telephone with representatives of Centerview to communicate that, if invited by the Special Committee, CD&R would
be prepared to consider exploring a potential transaction at an indicative valuation of $23.50 per share of Company common stock, which
represented a per share premium of approximately 46% above the closing price of the shares of Company common stock as of December 22,
2021. During this call, Messrs. Sleeper and Zrebiec indicated that CD&R was having difficulty seeing additional value above $23.50
per share, particularly after accounting for execution risk inherent in the Company’s standalone plans, the risk of economic downturn
or recession, and potential volatility in financing markets.
The disclosure under the subsection
captioned “Special Factors—Background of the Merger” is hereby amended and supplemented by adding to the sixth full
paragraph on page 20 of the Proxy Statement, the following (with new text underlined):
On
February 7, 2022, Messrs. Sleeper and Zrebiec spoke by telephone with representatives of Centerview to communicate that, if invited
by the Special Committee, CD&R would be prepared to consider exploring a potential transaction at an indicative valuation of $24.50
per share, which represented a per share premium of approximately 53% over the closing price of the shares of Company common stock
as of February 7, 2022 and a per share premium of approximately 74% over the closing price of the shares of Company common
stock as of February 4, 2022, the last trading day prior to speculation in the market regarding a potential transaction. The CD&R
representatives described this indication as the highest value CD&R believed it could offer, indicated that CD&R did not see incremental
value above $24.50 per share, and indicated that CD&R had considered, but decided against, lowering its indication of value when the
Company’s stock price recently had fallen below $15.00 per share.
The disclosure under the subsection
captioned “Special Factors—Background of the Merger” is hereby amended and supplemented by adding to the first full
paragraph on page 21 of the Proxy Statement, the following (with new text underlined):
On February 10, 2022, following multiple conversations
between representatives of CD&R and representatives of Centerview during which Centerview sought to obtain a higher valuation indication
from CD&R, Messrs. Sleeper and Zrebiec communicated that, if invited by the Special Committee, CD&R would be prepared to consider
exploring a potential transaction at a best and final indicative valuation of $24.65 per share, which represented a per share premium
of approximately 32% over the closing price of the shares of Company common stock as of February 10, 2022 and a per share premium of approximately
75% over the closing price of the shares of Company common stock as of February 4, 2022, the last trading day prior to speculation in
the market regarding a potential transaction. Messrs. Sleeper and Zrebiec stated that this indication was CD&R’s best and
final indication, that CD&R did not see incremental value above $24.65, that CD&R would not seek to transact at a higher valuation
and that no further indications would be forthcoming. Messrs. Sleeper and Zrebiec also reconfirmed that CD&R was not willing to sell
or reduce its investment in the Company, would not vote to approve any alternative transaction that would result in any such sale or reduction
and would not permit a so-called “go-shop” period following the execution of the merger agreement during which the Company
would be permitted to affirmatively seek a competing proposal from a third party. The parties discussed that, should the Special Committee
invite CD&R to proceed at the indicated value, the Special Committee and Board should grant CD&R a limited waiver from the standstill
provisions under the stockholders agreement, following which CD&R would submit a written transaction proposal that CD&R would
publicly disclose (as required by law) by filing amendments to its Schedule 13D filings with respect to the Company, and after such
filings the parties would plan for two to three weeks for negotiation of transaction documentation and for CD&R to complete its confirmatory
due diligence and negotiate financing commitments. It was understood that any transaction would remain subject to further review and final
approval or disapproval by the Special Committee, and that neither the Special Committee nor the Company would be committed to engage
in any transaction, whether at $24.65 per share or otherwise, unless and until the Special Committee and then the full Board (other than
the Recused Directors) made a final determination to approve a transaction and enter into a binding merger agreement.
The disclosure under the subsection
captioned “Special Factors—Opinion of Centerview Partners LLC—Discounted Cash Flow Analysis” is hereby amended
and supplemented by adding to the second full paragraph on page 38 of the Proxy Statement, the following (with new text underlined and
deleted text struck through):
In performing this analysis, Centerview calculated a range
of implied per share equity values for the Company by discounting to present value as of December 31, 2021 (using discount rates
ranging from 10.0% to 12.5%, reflecting Centerview’s analysis of the Company’s weighted average cost of capital and utilizing
Centerview’s professional judgment and experience) and the mid-year convention: (1) the forecasted fully taxed unlevered free
cash flows of the Company based on the forecastsFebruary 3 Projections over the period beginning January 1,
2022 and ending on December 31, 2026 (see the section of this proxy statement entitled “— Unaudited Prospective
Financial Information of the Company”) and (2) a range of implied terminal values of the Company at the end of the forecast
period shown in the forecasts, estimated by Centerview applying perpetuity growth rates to the Company’s unlevered free cash flows
for the terminal year ranging from 1.75% to 2.5%. As inputs to the weighted average cost of capital, Centerview took into account, among
other things, risk-free rate, equity risk premium, market size premium, the betas and capitalization of the selected companies, pre-tax
cost of debt and post-tax cost of debt. The range of perpetuity growth rates was estimated by Centerview utilizing its professional judgment
and experience, taking into account market expectations regarding long-term real growth of gross domestic product and inflation as well
as the Company’s long-term expected growth based on the internal data. Based on its analysis, Centerview calculated a range of implied
enterprise values of the Company. Centerview subtracted from this range the face value of the Company’s net debt of $2,687 million
(consisting of $3,081 million of debt and $394 million of cash) as of December 31, 2021 as set forth in the internal data to
derive a range of implied equity values for the Company. Centerview then divided this range of implied equity values by the number of
fully-diluted outstanding shares, which was approximately 134 million shares as of February 22, 2022 based on the internal
data to derive a range of implied values per share of approximately $20.50 to $35.50, rounded to the nearest $0.25. Centerview compared
such range to the consideration of $24.65 per share to be paid to the holders of Company common stock (other than excluded shares) pursuant
to the merger agreement.
The disclosure under the subsection
captioned “Special Factors—Opinion of Centerview Partners LLC—Other Factors” is hereby amended and supplemented
by adding to the paragraph carrying over from the bottom of page 38 on to page 39 of the Proxy Statement, the following (with new text
underlined):
Analyst
Price Targets Analysis. Centerview reviewed price targets for the shares in publicly available Wall Street research analyst
reports as of February 4, 2022, the last trading day prior to speculation in the market regarding a potential transaction, and March 4,
2022, the last trading day prior to the public announcement of the merger, and noted that such price targets were between $19.00 and $27.00
and $24.65 and $27.00, respectively, per share of Company common stock. Additional information concerning this analysis can be found
in the presentation made by Centerview to the Special Committee on March 5, 2022, which has been filed by the Company as an exhibit to
the Schedule 13E-3.
The disclosure under the subsection
captioned “Special Factors—Opinion of Centerview Partners LLC—Other Factors” is hereby amended and supplemented
by adding to the first full paragraph on page 39 of the Proxy Statement, the following (with new text underlined):
Premia
Paid Analysis. Centerview performed an analysis of the premia paid in selected precedent going-private transactions. Based
on the analysis above and other considerations that Centerview deemed relevant in its professional judgment, Centerview applied the 25
and 75 percentile premia in such transactions to (1) the unaffected closing price of the shares on February 4, 2022 of $14.09, (2) the
unaffected 30-day volume weighted average price for the shares of $15.94 and (3) the unaffected 52-week high for the shares of $19.50,
which analyses resulted in ranges of implied share prices of $16.50 to $20.00, $18.00 to $21.50 and $18.00 to $21.75, respectively, per
share of Company common stock. Additional information concerning this analysis can be found in the presentation made by Centerview
to the Special Committee on March 5, 2022, which has been filed by the Company as an exhibit to the Schedule 13E-3.
The disclosure under the subsection
captioned “Unaudited Prospective Financial Information of the Company—Prior Iterations of the Projections” is hereby
amended and supplemented by adding to paragraph carrying over from the bottom of page 45 on to page 46 of the Proxy Statement, the following
(with new text underlined):
The Preliminarily Presented Projections
were discussed with and made available to the Special Committee and Centerview in October 2021, and although the Special Committee
did not adopt or take a view on such projections at the time, the Special Committee authorized Centerview and the Company’s management
to provide, and Centerview and the Company’s management later provided, the base case and upside case portions of these projections
to CD&R.
Cautionary Statement Regarding Forward-Looking Statements
This communication includes forward-looking statements
within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, including statements about the potential benefits of the proposed acquisition, anticipated
growth rates, the Company’s plans, objectives, expectations, and the anticipated timing of the closing of the Merger. When used
in this communication, the words “believes,” “estimates,” “plans,” “expects,” “should,”
“could,” “outlook,” “potential,” “forecast,” “target” and “anticipates”
and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. Forward-looking
statements are based on a number of assumptions about future events and are subject to various risks, uncertainties and other factors
that may cause actual results to differ materially from the views, beliefs, projections and estimates expressed in such statements. These
risks, uncertainties and other factors include, but are not limited to, those discussed under “Risk Factors” in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 1, 2022 (as amended by Amendment No.
1 on Form 10-K/A, field with the SEC on May 2, 2022), the Company’s Quarterly Report on Form 10-Q for the period ended April 2,
2022, filed with the SEC on May 3, 2022 and the following: (1) the timing, receipt and terms and conditions of any required governmental
or regulatory approvals of the Merger that could reduce the anticipated benefits of or cause the parties to abandon the Merger; (2) risks
related to the satisfaction of the conditions to closing (including the failure to obtain necessary regulatory approvals or the necessary
approvals of the Company’s stockholders) in the anticipated timeframe or at all; (3) the risk that any announcements relating to
the Merger could have adverse effects on the market price of the Company’s common stock; (4) disruption from the Merger making it
more difficult to maintain business and operational relationships, including retaining and hiring key personnel and maintaining relationships
with the Company’s customers, vendors and others with whom it does business; (5) the occurrence of any event, change or other circumstances
that could give rise to the termination of the merger agreement entered into in connection with the Merger; (6) risks related to disruption
of management’s attention from the Company’s ongoing business operations due to the Merger; (7) significant transaction costs;
(8) the risk of litigation and/or regulatory actions related to the Merger or unfavorable results from currently pending litigation and
proceedings or litigation and proceedings that could arise in the future; (9) other business effects, including the effects of industry,
market, economic, political or regulatory conditions; (10) the ability to meet expectations regarding the timing and completion of the
Merger; (11) information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity,
malware or ransomware attacks; and (12) changes resulting from the COVID-19 pandemic, which could exacerbate any of the risks described
above.
Readers are cautioned not to place undue reliance
on forward-looking statements made by or on behalf of the Company. Each such statement speaks only as of the day it was made. The Company
undertakes no obligation to update or to revise any forward-looking statements. The factors described above cannot be controlled by the
Company.
Additional Information and Where to Find It
This communication is not intended to and does
not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for
any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities
in any jurisdiction in contravention of applicable law. In connection with the Merger, the Company will file relevant materials with the
SEC, including the Proxy Statement, and the Company and affiliates of CD&R have jointly filed a Transaction Statement on Schedule
13E-3 (the “Schedule 13E-3”). This communication is not a substitute for the Proxy Statement or any other document that the
Company may file with the SEC or send to its stockholders in connection with the Merger. THE COMPANY URGES YOU TO READ THE PROXY STATEMENT,
THE SCHEDULE 13E-3 AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE MERGER AND RELATED MATTERS. Investors will be able to obtain a free copy of the Proxy
Statement, the Schedule 13E-3 and other related documents (when available) filed by the Company with the SEC at the website maintained
by the SEC at www.sec.gov. Investors also will be able to obtain a free copy of the Proxy Statement, the Schedule 13E-3 and other documents
(when available) filed by the Company with the SEC by accessing the Investors section of the Company’s website at https://investors.cornerstonebuildingbrands.com/investor-home/default.aspx.
Participants in the Solicitation
The Company and certain of its directors, executive
officers and employees may be considered to be participants in the solicitation of proxies from the Company’s stockholders in connection
with the Merger. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of
the stockholders of the Company in connection with the Merger, including a description of their respective direct or indirect interests,
by security holdings or otherwise, will be included in the Proxy Statement when it is filed with the SEC. You may also find additional
information about the Company’s directors and executive officers in its Annual Report on Form 10-K for the year ended December 31,
2021, which was filed with the SEC on March 1, 2022, as amended by Amendment No. 1 on Form 10-K/A, which was filed with the SEC on May
2, 2022 and in other documents filed by the Company with the SEC. You can obtain free copies of these documents from the Company using
the contact information above.
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
| | CORNERSTONE BUILDING BRANDS, INC. |
| | | |
| By: | /s/
Alena S. Brenner |
| | | Name: Alena S. Brenner |
| | | Title: Executive Vice President, General Counsel and Corporate Secretary |
Date: June 17, 2022
