Taiga acquires Exterior Wood to expand wood treatment business
Taiga Building Products Ltd has announce that it has entered, through a wholly owned subsidiary, into a share purchase agreement (SPA) with Exterior Wood, Inc. and its shareholders, whereby Taiga will acquire all of the issued and outstanding common shares of Exterior Wood for a purchase price of US$42,000,000, subject to certain adjustments at closing of the acquisition in respect of working capital, cash and certain outstanding indebtedness. The acquisition has been structured to close on a cash free debt free basis.
Exterior Wood has been operating a wood treatment facility and distribution centre in Washougal, Washington since 1977, and services retail building supply centres throughout the western United States (U.S.) and Canada with a wide array of pressure treated products. The acquisition will expand Taiga's existing wood treatment operations at three facilities in Canada, with additional penetration into the United States market.
“The acquisition of Exterior Wood and the expansion of our wood treatment business represents a significant step forward in our corporate strategy of pursuing value enhancing opportunities,” Trent Balog, president and CEO of Taiga, commented. “With a well-established customer and supplier base, we believe that the Exterior Wood acquisition will be accretive to Taiga's business and will successfully integrate within our proven operational capabilities, in addition to expanding our distribution reach in a strategic region. We look forward to working with the Exterior Wood team who have dedicated many years to the development and achievements of this business.”
“We are excited to be associated with a company as well respected in our industry as Taiga. In addition to placing a high value on our customer relationships, suppliers and employees, it has a culture that matches very well with the one we have developed over time at Exterior Wood,” Dave Perry, President of Exterior Wood, added. “We are enthusiastic about what the future holds as we work together.”
Closing of the SPA is subject to various conditions including the parties entering into an escrow agreement to fund certain environmental remediation measures using a portion of the purchase price up to $3.84 million; Exterior Wood entering into a new lease in respect of the occupied premises; and the receipt of certain third party consents and approvals for the acquisition, among others. Closing of the SPA is expected to occur on or about July 31, 2018. Taiga expects to finance the purchase price primarily using its senior credit facility.