Stella-Jones acquires US treating plants
October 15, 2013, Montreal - Stella-Jones Inc. has agreed to acquire the operating assets of Arizona Pacific Wood Preserving, Inc., Nevada Wood Preserving, Inc. and Pacific Wood Preserving of Oregon, Inc.
By Scott Jamieson
Commonly referred to as The Pacific Wood Preserving Companies, they ran wood treating plants in Oregon, Nevada and Arizona and their wood concentration yard in Texas. These businesses consist of the manufacture of treated wood utility poles and railway ties, along with a variety of lumber related products. Sales for the fiscal year ended October 31, 2012 reached approximately US$52.4 million. The assets of Pacific Wood Preserving of Bakersfield, Inc. are not being acquired and existing shareholders will continue to own this operating business.
The definitive agreement provides for a purchase price of approximately US$33.0 million plus the sellers’ net working capital at closing (estimated at approximately US$24.0 million). The transaction is expected to close in November 2013 and is subject to satisfactory completion of environmental due diligence, assignment of certain governmental authorizations and permits and other customary closing conditions. Stella-Jones plans to finance the acquisition through a combination of its existing credit facilities and a vendor note of US$7.0 million.
“The acquisition of these facilities will further enhance Stella-Jones’ offerings and expand its capability to supply the needs of North America’s railroad and utility pole industries” said Brian McManus, president and CEO of Stella-Jones.
Stella-Jones Inc. (TSX:SJ) is a leading producer and marketer of pressure treated wood products. The company supplies North America’s railroad operators with railway ties, timbers and recycling services; and the continent’s electrical utilities and telecommunications companies with utility poles. Stella-Jones also provides industrial products and services for construction and marine applications, as well as residential lumber to retailers and wholesalers for outdoor applications. The Company’s common shares are listed on the Toronto Stock Exchange.