Stella-Jones Inc. has signed a non-binding letter of intent to acquire the shares of McFarland Cascade Holdings, Inc., a provider of treated wood products based in the state of Washington.
The letter of intent contemplates a purchase price of approximately $230.0 million, which includes approximately $113.0 million of net working capital and the assumption of certain liabilities. The transaction, if finalized, is expected to close in November 2012 and is subject to customary closing conditions, including entry into a definitive purchase agreement, customary approvals and satisfactory due diligence. Stella-Jones has already received U.S. antitrust clearance with regard to the proposed acquisition. Stella-Jones plans to finance the transaction through a combination of term financing and equity.
“The potential acquisition of McFarland would further enhance the range of Stella-Jones’ offerings in the North American wood treating industry. A strong commitment to product quality and customer service has been a hallmark of McFarland’s business operations, which Stella-Jones is committed to continue and build on,” said Brian McManus, president and chief executive officer of Stella-Jones.