LANGLEY, BC - Hardwoods Distribution Inc. (TSX: HWD) acquired assets of Olam Wood Products, a tropical lumber importer based in Leland, NC. Hardwoods Distribution Inc. (TSX: HWD) is one of North America's largest wholesale distributors of hardwood lumber and related sheet good products, operating a network of 31 distribution centers in the U.S. and Canada.
Olam imports high quality tropical lumber and decking material from Africa and South America for resale to industrial customers and wholesale distributors in North America. Hardwoods amended its U.S. credit facility concurrently with closing the Transaction.
The asset acquisition, closed May 31, was valued at $2.8 million including inventory and some equipment. Hardwoods Distribution also hired Olam Wood Products employees and assumed the existing lease of its 40,000 square foot warehouse and office in Leland, NC.
Hardwoods Distribution says its existing credit facilities were used to finance the deal, with its U.S. operating subsidiary increasing its borrowing limit by $5 million (to $50 million total) to fund it. "The acquisition adds more than $4 million annually to Hardwood's sales," said Lance Blanco, President and CEO of Hardwoods, "and gives us a presence on the U.S. East Coast. With an improving U..S housing market we believe this is a well-timed and well-priced addition to our U.S. branch network."
Last quarter, Hardwoods Distribution Services reported a 19% increase in sales, which reached $87 million for the period ended March 31, 2013.
"We achieved our best quarterly sales and EBITDA results in over five years,” said Blanco, crediting an expansion program, and rebounding U.S. housing market. “Most of our sales growth came from the U.S. market, where higher volume demand was driven primarily by the ongoing recovery."
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