United States securities and exchange commission logo
September 13, 2022
Hiranda Donoghue
General Counsel
MasterBrand, Inc.
520 Lake Cook Road, Suite 300
Deerfield, Illinois
Re: MasterBrand, Inc.
Draft Registration
Statement on Form 10
Filed on August 17,
2022
CIK No. 0001941365
Dear Ms. Donoghue:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form 10 filed August 17, 2022
SUMMARY, page 1
1. Please revise your
summary to provide a more balanced discussion of your company and
products. Balance the
discussion of your market leadership and your strengths on page
6 with an equally
prominent discussion of your weaknesses, including your plan to incur
indebtedness prior to
or at the time of the distribution.
Questions and Answers about the Separation, page 11
2. Please revise to
address any material changes in stockholder rights between the existing
Fortune Brands common
stock and the MasterBrand common stock. If none, please
include a negative
statement to that effect.
Hiranda Donoghue
FirstName LastNameHiranda Donoghue
MasterBrand, Inc.
Comapany 13,
September NameMasterBrand,
2022 Inc.
September
Page 2 13, 2022 Page 2
FirstName LastName
Can Fortune Brands decide to cancel the Distribution even if all of the
conditions have been
satisfied?, page 12
3. Please revise this Q&A to discuss any material consequences to
stockholders if Fortune
Brands waives any of the conditions described and proceeds with the
spin-off.
Reasons for the Separation, page 49
4. Please briefly describe any material negative factors and risks that
the board considered
when determining whether to engage in the spin-off transaction.
5. Wherever applicable, please expand the bullet point list to better
explain how it was
determined that separating MasterBrand's businesses from Fortune Brand
s current
business operations would be in the best interests of Fortune Brands
and its stockholders.
Discuss how the separation will lead to the better focus of each
company s specific
operational and growth strategies. Discuss the "unique operating
needs" of each
company, explain each company s tailored capital structures and
capital deployment
strategies. Explain in detail the decision to separate now as opposed
to any other time and
the reasons underlying the chosen timing.
Capitalization, page 59
6. Please include a double line underneath the cash and cash equivalents
line so as to clearly
distinguish it from the capitalization line items.
Unaudited Pro Forma Condensed Consolidated Financial Statements
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Note 3: Transaction Accounting Adjustments for the Separation, page 65
7. Refer to adjustment (e). Please expand the footnote to also describe
that these
nonrecurring costs will not recur beyond 12 months after the
transaction and remove the
adjustment from your pro forma income statement for the twenty-six
weeks ended June
26, 2022. Refer to Article 11-02(a)(6)(i)(B) of Regulation S-X.
8. We note that adjustment (i) represents costs related to stock-based
compensation
arrangements in connection with the Separation including modification
of historical
Fortune Brands grants. Please explain to us why it appears this
adjustment will not be
reflected on the pro forma statement of income.
Note 4. Autonomous Entity Adjustments, page 66
9. Please revise your disclosure relating to adjustment (m) to include
the material
assumptions used and how the amount was calculated or determined. See
Rule 11-
02(a)(11)(iii).
Note 5. Management Adjustments, page 66
Hiranda Donoghue
FirstName LastNameHiranda Donoghue
MasterBrand, Inc.
Comapany 13,
September NameMasterBrand,
2022 Inc.
September
Page 3 13, 2022 Page 3
FirstName LastName
10. Please revise your disclosure to include the estimated time frame for
achieving the
synergies and dis-synergies for each adjustment. See Rule
11-02(a)(7)(ii)(D) of
Regulation S-X.
Management's Discussion and Analysis of Financial Condition and Results of
Operations Results
of Operations
Results of Operations, page 73
11. Please revise to quantify the impact of the factors that you identify
as impacting net sales
and operating results during each period presented, including the
impact of changes in
volume and price.
General
12. Please disclose whether and how your business segments, products,
lines of service,
projects, or operations are materially impacted by supply chain
disruptions. For example,
discuss whether you have or expect to:
suspend the production, purchase, sale or maintenance of certain
items due to a lack
of raw materials, parts, or equipment; inventory shortages; closed
factories; reduced
headcount; or delayed projects;
experience labor shortages that impact your business;
experience cybersecurity attacks in your supply chain;
experience higher costs due to constrained capacity or increased
commodity prices or
challenges sourcing materials;
experience surges or declines in consumer demand for which you are
unable to
adequately adjust your supply;
be unable to supply products at competitive prices or at all due
to export
restrictions, sanctions, tariffs, trade barriers, or political or
trade tensions among
countries; or
be exposed to supply chain risk in light of Russia s invasion of
Ukraine and/or related
geopolitical tension or have sought to de-globalize your
supply chain.
Explain whether and how you have undertaken efforts to mitigate the
impact and where
possible quantify the impact to your business.
You may contact SiSi Cheng at (202) 551-5004 or Claire Erlanger at (202)
551-3301 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Bradley Ecker at (202) 551-4985 or Geoffrey Kruczek at (202) 551-3641
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing
Hiranda Donoghue
MasterBrand, Inc.
FirstName
September LastNameHiranda
13, 2022 Donoghue
Comapany
Page 4 NameMasterBrand, Inc.
September 13, 2022 Page 4
cc: Samir Gandhi
FirstName LastName