Stella-Jones to acquire new facilities
Oct. 8, 2013, Montreal - Stella-Jones has signed a definitive agreement to acquire all of the operating assets of The Pacific Wood Preserving Companies conducted at their 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 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 Chief Executive Officer of Stella-Jones.