Hardwoods Announces Acquisition of Import Lumber Business and Amendment to US Credit Facility
TRADING SYMBOL: Toronto Stock Exchange - HWD
LANGLEY, BC, June 3, 2013 /CNW/ - Hardwoods Distribution Inc. ("Hardwoods") announced today the acquisition of certain assets (the "Transaction") associated with the business known as Olam Wood Products ("OWP" or the "Business") conducted in Leland, North Carolina. The Business is an importer of high quality tropical lumber and decking material from Africa and South America for resale to industrial customers and wholesale distributors located in North America. Hardwoods also amended its US credit facility concurrently with closing the Transaction.
The Transaction is structured as an asset acquisition with a purchase
price of US$2.8 million. Closing date for the Transaction was May 31,
The acquired assets consist of inventory and some equipment. Hardwoods
also hired the employees of OWP, and assumed the existing lease of the
Business comprising 40,000 square feet of warehouse and office space in
No other liabilities or contractual obligations were assumed by
Hardwoods as part of the Transaction.
- Hardwoods existing credit facilities were utilized to finance the purchase price. Hardwoods US operating subsidiary amended its credit facility to increase maximum borrowings available under the facility from US$45 million to US$50 million.
"The acquisition of the operating assets of OWP is an excellent fit with our growth strategy," said Lance Blanco, President and CEO of Hardwoods. "The acquired Business builds upon Hardwoods well-established strength as an importer of hardwood products by extending our direct sourcing capabilities to tropical lumber products from Africa and South America. The acquisition adds more than $4 million annually to Hardwoods sales, is expected to contribute to current year earnings, and gives us a presence on the US east coast. With an improving US housing market we believe this is a well-timed and well-priced addition to our US branch network," said Mr. Blanco.
About Hardwoods Distribution Inc.
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 centres in the US and Canada.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This news release includes forward-looking statements. These involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. Such statements may involve, but are not limited to: our belief the Business builds upon Hardwoods well-established strength as an importer of hardwood products by extending our direct sourcing capabilities to tropical lumber products from Africa and South America; our belief that the acquisition adds more than $4 million annually to Hardwoods sales and is expected to contribute to current year earnings.
These forward-looking statements reflect current expectations of management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: national and local business conditions; political or economic instability in local markets; competition; consumer preferences; spending patterns and demographic trends; legislation or governmental regulation.
Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, management cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available.
All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as may be required by law, Hardwoods undertakes no obligation to revise or update any forward looking information as a result of new information, future events or otherwise after the date hereof.
SOURCE: Hardwoods Distribution Inc.For further information: