Stella-Jones Completes Acquisition of the Wood Treating Facilities of Boatright Railroad Products
23 May 2014 - 4:29AM
Marketwired
Stella-Jones Completes Acquisition of the Wood Treating Facilities
of Boatright Railroad Products
MONTREAL, QUEBEC--(Marketwired - May 22, 2014) - Stella-Jones
Inc. (TSX:SJ) today announced that it has completed the acquisition
of the wood treating facilities of Boatright Railroad Products,
Inc. 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.
ABOUT 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 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, including information relating to the Company's future
earnings and to potential synergies resulting from the acquisition
of Boatright Railroad Products, Inc. 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,
failure to obtain permits from the relevant governmental
authorities, fluctuations in quarterly results, evolution in
customer demand for the Company's products and services, the impact
of price pressures exerted by competitors, the ability of the
Company to raise the capital required for acquisitions, and general
market trends or economic changes. As a result, readers are advised
that actual results may differ from expected results and should not
place undue reliance on forward-looking information.
Source:Stella-Jones Inc.Eric Vachon, CPA, CASenior
Vice-President and Chief Financial Officer(514)
940-3903evachon@stella-jones.comMartin Goulet, CFAMaisonBrison
Communications(514) 731-0000martin@maisonbrison.com
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