MARKHAM,  ON — Flakeboard Company Limited and Arauco announced June 8 that the two companies have reached an agreement for the sale of all outstanding Flakeboard shares to Arauco.

For Arauco, the purchase agreement would combine Flakeboard’s seven North American operating facilities with that of their recently acquired Particleboard and MDF plant in Moncure, North Carolina.

According to Flakeboard President and CEO, Kelly Shotbolt; “We are extremely excited about our planned integration with Arauco and specifically about the opportunities that the new ownership structure brings for the larger company, our customers, our combined employees, and the communities in which we operate.”

Arauco has indicated that the eight North American assets will operate under the Flakeboard name and that the Flakeboard Senior Management team will be tasked with integrating and managing the combined operations. Kelly Shotbolt will be retained as head of Flakeboard North America.

The two companies are targeting a closing date during the second half of 2012.

Credit Suisse acted as exclusive financial advisor, and Skadden, Arps, Slate, Meagher and Flom LLP and Gowling Lafleur Henderson LLP acted as legal advisors to Flakeboard.

Flakeboard Company Limited is a privately held company based in Markham, Ontario which manufactures composite panels and thermally-fused melamine panels.

Arauco is one of the major forestry companies in Latin America in terms of land surface and performance of its plantations, kraft market pulp manufacture and the production of sawn timber, panels and mouldings. Its products are sold in more than 70 countries. The company employs about 35,000 direct and indirect workers around the world, through its production operations in Chile, Argentina, Brazil, Uruguay and the United States, and its network of sales offices at the global level.