Having received this clearance, the transaction now remains subject to customary closing conditions, including entry into a definitive purchase agreement and satisfactory due diligence. The non-binding letter of intent signed on December 14, 2009, between Stella-Jones and Tangent provides the Company with the exclusive right to negotiate and execute a definitive purchase agreement during the period leading up to the end of the close of the Company's first quarter of 2010. The parties intend to close the transaction by the Termination Date.
Tangent serves the railroad industry with treated wood products, mainly railway ties, through facilities located in Warrior, Ala.; Terre Haute and Winslow, Ind.; Alexandria, La., and McAlisterville, Pa. The wood preservative, creosote, is produced at its distilleries in Terre Haute, Indiana and Memphis, Tenn. Life-cycle solutions, consisting of tie pickup and tie disposal, are carried out at three facilities in Alabama, Minnesota and North Carolina. Tangent's sales for the year ended December 31, 2009 are expected to reach approximately US$175 million.
Stella-Jones plans to finance the acquisition through a combination of equity and debt, subject to prevailing market conditions.