MONTRÉAL – Resolute Forest Products Inc. completed two separate transactions with Louisiana-Pacific Corp. to grow its wood products business.
The company has acquired a 50 percent equity interest in two joint ventures it had with Louisiana-Pacific to produce I-joists in the Lac-Saint-Jean region of Quebec for $50 million.
Resolute-LP Engineered Wood Larouche Inc. and Resolute-LP Engineered Wood St-Prime Limited Partnership are located in Larouche and Saint-Prime, respectively, and are equity method investments in which Resolute has a 50% interest in each entity. Resolute operates the facilities and its joint-venture partner, Louisiana-Pacific, sells the products.
"By acquiring the other 50% of the I-joist partnership, we solidify our presence in the growing and attractive engineered wood products segment with assets we know well, staffed with a talented and dedicated workforce of more than 175 people," said Remi G. Lalonde, president and CEO. "In addition to locking in the downstream integration of over 60 million board feet of lumber capacity, the transaction allows us to consolidate the full value of the EBITDA it generates, 50% of which had up to now been included in other income. I would like to acknowledge our successful partnership with Louisiana-Pacific that has spanned several decades, one that we dissolve amicably as we each pursue value-generation opportunities for our respective companies."
Resolute will enter into agreements with Louisiana-Pacific to continue to serve as the exclusive distributor of the engineered wood products manufactured at the two operations.
The acquisitions are expected to close in the first half of 2022. Resolute intends to pay for the purchases with cash on hand. It held cash and equivalents of $152 million as of December 31, 2021.
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