LP to Buy Canfor’s Share in Peace Valley OSB Joint Venture
NASHVILLE, Tenn.--(BUSINESS WIRE)-- Louisiana-Pacific Corporation (LPX) announced today that it has entered into a Letter of Intent with Canfor Corporation (TSX: CFP) to acquire Canfors 50 percent share in the Peace Valley Oriented Strand Board (OSB) joint venture in Fort St. John, British Columbia. By completing this acquisition, LP will become the sole owner of the Peace Valley OSB mill.
The Peace Valley mill has been a safe, productive and important part of our OSB strategy for the past seven years, LP CEO Curt Stevens said. The mill will continue to play an important role in LP as the housing market rebounds.
The purchase price is estimated at $75 million CDN including working capital. In addition, Canfor may receive additional annual consideration over a three year period based on Peace Valley OSBs annual EBITDA.
LP and Canfor currently jointly run the mill, with LP providing operational support while Canfor provides labor, fiber resource management and administrative services. LP already sells 100 percent of the product made there under the LP brand, so customers will see no change in product quality or service.
Once the agreement closes, Canfor will continue to provide fiber resource management and temporarily provide administrative services during the transition.
The completion of this transaction is expected to occur by the end of this year, but is subject to the parties agreeing to final terms and conditions, the completion of due diligence, obtaining necessary regulatory approvals and the execution of definitive agreements.
The Peace Valley mill has an annual production capacity of 820 million square feet of OSB. It currently operates three shifts with plans to add a fourth shift in the first quarter of 2013 depending on market conditions.
Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction. From manufacturing facilities in the U.S., Canada, Chile and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers. Founded in 1973, LP is headquartered in Nashville, Tennessee and traded on the New York Stock Exchange under LPX. For more information, visit www.lpcorp.com.
Mary Cohn, 615-986-5886
Becky Barckley, 615-986-5600
Mike Kinney, 615-986-5600
Source: Louisiana-Pacific CorporationCopyright Business Wire 2012