Stella-Jones acquires Boatright
May 23, 2014, Montreal - Stella-Jones has completed the acquisition of the wood treating facilities of Boatright Railroad Products located in Montevallo and Clanton, Alabama. These facilities manufacture, sell and distribute creosote and borate-treated crossties as well as switch ties, tie plugs and bridge timbers to railroads and railroad contractors. Sales for the 12-month period ended December 31, 2013 reached US$73.5 million.
The purchase price was approximately US$60.0 million, plus the sellers' inventory at closing, estimated at US$9.0 million, subject to post-closing adjustments. Stella-Jones has financed the transaction through a combination of its existing committed revolving credit facility, which has been increased to $450.0 million, and a five-year unsecured promissory note of US$15.0 million. An amount of US$20.0 million is being held in escrow pending the formal title transfer of the Montevallo assets, which shall occur concurrently with the issue to Stella-Jones, of certain governmental permits relating to the facility.
"The acquisition of these facilities further enhances our range of treated wood products and services to the North American railroad industry. We expect this transaction to yield synergies and to be immediately accretive to earnings, as we continue to optimize the overall efficiency of our continental network," said Brian McManus, President and Chief Executive Officer of Stella-Jones.
May 23, 2014 By Marketwired
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