MONTRÉAL, Quebec - Stella-Jones Inc. (TSX:SJ) says its wholly-owned subsidiary, McFarland Cascade Holdings, Inc., has signed a definitive agreement to purchase Kisatchie, a Pineville, Louisiana treated wood products manufacturer which makes telephone poles, timbers and pilings, and operates Kisatchie Trucking and Kisatchie Midnight Express.
Stella-Jones also acquired McFarland Cascade Holdings, Inc. Lufkin Creosoting Co., which produces treated poles and timbers at its wood treating facility in Lufkin, Texas. Its sales 2015 were US$34.2 million.
A non-binding letter of intent for the acquisition was announced by Stella-Jones earlier this year for Kisatchie, which did US $51.8 million in sales last year. Stella-Jones says it will pay US $42.5 million. The deal is expected to close during the second quarter of 2016 and will be financed through a combination of debt and a vendor note.
With 27 wood treating facilities in the U.S. and Canada, Stella-Jones supplies railway ties and timbers, and the continent's electrical utilities and telecommunication companies with utility poles. Stella-Jones also manufactures and distributes residential lumber and accessories to retailers for outdoor applications, as well as industrial products for construction and marine applications.
First quarter Stella-Jone reported sales of $421.0 million, up 23.6 percent from a year ago. The acquisition of Ram Forest Group
Inc. on October 1, 2015, contributed sales of approximately $9.3 million, while the conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones’ reporting currency, versus the U.S. dollar, increased the value of U.S. dollar denominated sales by about $35.9 million.
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