CD&R-backed Cornerstone Building Brands is close to securing around $500m in debt from a consortium of lenders including Monarch, as the company struggles with profitability amid a broader sector downturn, according to 9fin sources.
The new debt will be tied to the building product group’s metal solutions segment — which designs, produces and distributes metal products used in building construction — in a transaction that will see it dropped out of Cornerstone’s restricted group, the sources said.
Cornerstone’s metal solutions business is the most attractive of its three segments, reporting a 12.4% growth in sales in Q2 26 figures released in August. The group’s two other segments, siding and accessories and windows and doors, posted a 0.8% and 5.5% decline in sales over the quarter.
Despite posting modest sales growth of 1.1% year-over-year, with $1.4bn in net sales over its most recent quarter, margin pressure knocked adjusted EBITDA by 44.1% to $99.8m. Management attributed the decline to a cocktail of cost inflation and lower sales volumes.
Cornerstone has tappedadvisors from Latham & Watkins, PJT Partners, and AlixPartners, and had been exploring some form of asset-backed financing with private credit lenders, as reported.
Existing lenders,...
