Stella-Jones Inc. said that it has received early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with its proposed acquisition of Tangent Rail Corporation.
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
Stella-Jones plans to
finance the acquisition through a combination of equity and debt, subject to
prevailing market conditions.