Boise Cascade Company (NYSE: BCC) is set to acquire Coastal Plywood Company from Coastal Forest Resources Company in a deal that will expand its capacity and offerings.
According to the June 10 deal, Boise Cascade will buy Coastal Plywood and its two manufacturing locations for approximately $512 million in cash. Its manufacturing locations are in Havana, Florida, and Chapman, Alabama, with approximately 750 employees. The transaction does not include Coastal’s parent company or its timberlands assets.
“This acquisition incrementally expands our veneer capacity in support of our customers,” Nate Jorgensen, CEO, Boise Cascade, said in a press release. “Near term, it provides us the ability to optimize our existing engineered wood products (EWP) asset base. Longer term, we are excited to fully integrate this strategic venture and we intend to invest $50 million into our Southeast operations over a three-year period to further our EWP production capacity.”
As noted in the filings, Coastal Plywood is “a provider of quality plywood, lumber, and treated wood products throughout the eastern U.S.” Meanwhile, Boise Cascade is a large producer of “engineered wood products and plywood” as well as a “wholesale distributor of building products.”
“Coastal has a long history of manufacturing quality products and a strong reputation in the markets we serve,” Travis Bryant, CEO of Coastal Forest Resources Company, said in a press release. “This transaction represents an opportunity for our talented and dedicated employees to join a dynamic organization, offering them a secure future with great opportunities ahead.”
Boise Cascade plans to fund the transaction and other related expenses from its existing cash balances.
The deal is expected to close in Q3 2022, subject to customary closing conditions and regulatory approval.
Boise Cascade’s legal advisor is Perkins Coie LLP. Coastal’s legal advisor is Hunton Andrews Kurth LLP and its financial advisor is Harris Williams.
Prior to the announcement, Boise Cascade’s stock was valued at $80.17 on June 9. When it was announced on June 10, the stock was valued at $77.20. A few days later on June 14, stocks closed at $71.92.
This deal comes after Boise Cascade purchased Georgia-Pacific’s engineered wood business for $215 million in 2016.