Hard­woods acquires Downes & Reader for $6M (U.S.)

Stockwatch Daily - - INDUSTRIALS & MATERIALS - Mr. Rob Brown re­ports

HARD­WOODS DIS­TRI­BU­TION Inc. has, through its sub­sidiary Rugby Hold­ings LLC, pur­chased sub­stan­tially all of the as­sets and as­sumed cer­tain li­a­bil­i­ties of Downes & Reader Hard­wood Com­pany Inc. (D&R) for a to­tal value of $6.0-mil­lion (U.S.).

D&R is a dis­trib­u­tor of hard­wood lum­ber with four lo­ca­tions in the United States North­east and es­ti­mated an­nual sales of $25-mil­lion (U.S.). D&R ser­vices both the whole­sale and re­tail cus­tomer seg­ments, adding over 2,400 new cus­tomers for the com­pany. Go­ing for­ward, the D&R lo­ca­tions will op­er­ate as part of the Rugby brand. The com­pany does not ex­pect to record any good­will or in­tan­gi­ble as­sets re­lated to the trans­ac­tion.

“The U.S. North­east is an at­trac­tive mar­ket with a pop­u­la­tion base of over 40 mil­lion peo­ple, and we’re thrilled to have D&R, a highly re­spected hard­wood lum­ber dis­trib­u­tor in the re­gion, join our team,” com­mented Rob Brown, Hard­woods’ pres­i­dent and chief ex­ec­u­tive of­fi­cer. “This ac­qui­si­tion pro­vides us with turnkey ac­cess to a com­pre­hen­sive lum­ber prod­ucts of­fer­ing in the U.S. North­east, brings us a sig­nif­i­cant num­ber of new cus­tomers and is im­me­di­ately ac­cre­tive to share­hold­ers. We have been suc­cess­ful with our ac­qui­si­tion strat­egy, hav­ing now com­pleted six ac­qui­si­tions in the last six years, and we will con­tinue to pur­sue trans­ac­tions that com­ple­ment our in­ter­nal growth strate­gies.”

The trans­ac­tion pur­chase price was fi­nanced by a draw on the com­pany’s ex­ist­ing U.S. credit fa­cil­ity.

About Hard­woods Dis­tri­bu­tion Inc.

Hard­woods is North Amer­ica’s largest dis­trib­u­tor of ar-

chi­tec­tural-grade build­ing prod­ucts to the res­i­den­tial and com­mer­cial con­struc­tion mar­kets. The com­pany op­er­ates a North Amer­i­can net­work of 62 dis­tri­bu­tion cen­tres, as well as one sawmill and kiln dry­ing op­er­a­tion.

Robert James Brown, Peter Mor­ris Bull, Michelle Lewis, Jim Ma­caulay, Ed­ward Lawrence Sauder, Wil­liam Lawrence Sauder, Gra­ham McGre­gor Wil­son

(HWD) Shares: 21,363,606

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