EL DORADO, AR - Deltic Timber Corporation has agreed to purchase the 50 percent membership interest of Del-Tin Fiber LLC, a manufacturer of MDF, which came into the possession of International Paper when it purchased Temple-Inland last February for $20 million.
International Paper made it clear that it had no interest in remaining in the wood composite panel manufacturinig business when it agreed to sell the Temple Products Building division to Georgia-Pacific LLC for $750 million in cash in December. That sale included 16 wood and panel mills.
Del-Tin Fiber of El Dorado, AR, will become 100 percent owned by Deltic having started as TIN Inc., a joint venture between Deltic and Temple Inland. The company has owned 50 percent of the facility since it was constructed in 1998. Planer shavings and other residuals from a sawmill owned by Del-Tin in El Doroado are used to make the MDF.
The Del-Tin plant has an annual capacity of 150 million square feet (3/4-inch basis), "making it one of the largest plants of its type in the world," according to the Deltic Timber website.
Ray Dillon, president and CEO. of Del-Tin, said, “This investment fits our strategy to grow the assets of Deltic through strategic opportunistic acquisitions. When this strategy is accomplished by an opportunity to grow through additional ownership in a facility that is located here in El Dorado, Arkansas, in an industry that we already know well, and in a plant in which our personnel have been actively involved on a daily basis, the potential synergy should prove accretive to Deltic’s financial performance."
The $20 million aggregate purchase price includes $5.156 million in cash and an assumption of TIN, Inc.’s $14.844 million in debt guarantees associated with Union County, Arkansas Taxable Industrial Development Revenue Bonds that were issued in 1998 to finance the construction of the Del-Tin Fiber facility. The bonds have a maturity date of December 1, 2027.
Deltic Timber Corporation owns more than 450,000 acres of Arkansas and also has operations in northern Louisiana.
Have something to say? Share your thoughts with us in the comments below.