Hardwoods Distribution to buy Frank Paxton Lumber
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Hardwoods Distribution to buy Frank Paxton LumberLANGLEY, BC  – Hardwoods Distribution Inc. says it will pay $13 million for the Frank Paxton Lumber Company LLC, a  remanufacturer and distributor of premium hardwood lumber, millwork and architectural sheet goods. Hardwoods said the deal will icnrease revenue by $45 million annually.

Founded in 1914, The Frank Paxton Lumber Company has five branches doing millwork and warehousing, in Chicago, Illinois, Cincinnati, Denver, Kansas City, and San Antonio. Hardwoods says it will not acquire any real estate, but will enter into lease agreements covering Paxton’s five operating locations.

Acquired assets will consist principally of trade accounts receivable, inventory, and equipment. The purchase price will be finalized based upon the value of the acquired assets at closing.

Hardwoods Distribution, which is publicly traded on the Toronto exchange, says it will use existing credit facilities to finance the deal. Hardwoods, with 26 distribution centers located across North America, converted to a corporation from the Hardwoods Distribution Income Fund on July 1, 2011.

Lance Blanco, CEO of Hardwoods, said  “Our board of directors and management team identified that while expense reduction had played a vital role in seeing us safely through the recent economic downturn, the time was now right to make a shift to strengthen our emphasis on market expansion.

Blanco said Hardwoods is pursuing end-market diversification, in particular in commercial and institutional construction markets, leveraging its import products, and focusing on expansion in high-potential geographic markets "where demand for hardwood products is significant, but Hardwoods currently holds relatively small or no market share.”

“The acquisition of the Frank Paxton Lumber Company is an excellent fit with our market expansion strategies, and will add some $45 million annually in profitable sales to our business,” said Blanco. “Paxton’s expertise in architectural millwork provides it with a strong base of customers in commercial and institutional markets. Each of Paxton's facilities manufactures custom architectural millwork and mouldings.

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