Stella-Jones to buy Lufkin Creosoting
February 3, 2016 - Stella-Jones Inc. announced that its wholly-owned subsidiary, McFarland Cascade Holdings, Inc., has signed a non-binding letter of intent to purchase the shares of Lufkin Creosoting Co., Inc. (Lufkin Creosoting).
Lufkin Creosoting produces treated poles and timbers at its wood treating facility in Lufkin, Texas. Its consolidated sales for the year ended December 31, 2015 reached approximately US$34.2 million.
The transaction, if finalized, is expected to close in April 2016 and is subject to customary conditions, including satisfactory due diligence and signature of a definitive share purchase agreement. Stella-Jones plans to finance the transaction through a combination of debt financing and a vendor note and may consider proceeding with an equity offering depending on market conditions.
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 and timbers, and the continent's electrical utilities and telecommunication companies with utility poles. Stella-Jones also provides residential lumber to retailers and wholesalers for outdoor applications, as well as industrial products for construction and marine applications. The company's common shares are listed on the Toronto Stock Exchange.
Except for historical information provided herein, this press release contains information and statements of a forward-looking nature concerning the proposed acquisition described herein. These statements are based on suppositions, risks and uncertainties as well as on management's best possible evaluation of future events. Such risks and uncertainties include, without excluding other considerations, the failure to satisfy closing conditions and the failure to complete or delay in completing the proposed acquisition for any other reason. As a result, readers are advised that actual results may differ from expected results and should not place undue reliance on forward-looking information.