STELLA-JONES BUYS U.S. LUMBER FACILITIES

Stella-Jones Inc. is further expanding its North American network for supplying utility poles and railway ties with the purchase of wood treatment facilities in Oregon, Nevada and Arizona for US$57-million, including US$24-million in working capital. The acquisition of the Pacific Wood Preserving Cos. is expected to close in November and be funded primarily from existing credit facilities and a US$7-million vendor note. The transaction includes a wood concentration yard in Texas but excludes operations in Bakersfield, Calif. The acquired companies had US$52.4-million of sales in the past fiscal year, about 5% of Stella-Jones’ projected fiscal 2013 revenue. Stella-Jones chief executive Brian McManus says the acquisition enhances the company’s offerings and expands its ability to supply the North American railway and utility pole industries. Pierre Lacroix of Desjardins Capital Markets said the transaction should boost Stella-Jones earnings by 2% to 3%, adding 10¢ to 15¢ per share. He says the acquisition will complement the Montrealbased company’s growth from a new tie facility in Georgia and upgrades to its facility in British Columbia.