Louisiana-Pacific Corp. has announced that its subsidiary, LP South America (LPSA), has purchased the remaining 25% interest in an oriented strand board (OSB) mill in Ponta Grossa, Parana, Brazil.
In 2008, LPSA entered into a joint venture agreement with Masisa-Brasil in which LPSA bought 75% of the plant, called LP-Brasil OSB Industria e Comercio S.A., and its assets. The purchase agreement included a put/call option for the remaining Masisa ownership. On May 12, 2011, Masisa exercised its option to sell its remaining 25% ownership for $24 million, including working capital. The acquisition was funded with $19.5 million of cash on hand and $4.5 million of borrowings under a short-term credit facility with a Chilean bank. LP-Brasil expects to borrow approximately $10 million under a term loan from a Brazilian bank in the near future to replenish its South American cash balance.
"The completion of this purchase is an important next step in our strategic focus on growing business in South America," said Rick Olszewski, LP's executive VP sales and president of LPSA.
The Ponta Grossa OSB plant was placed in service in 2003 and has an annual production capacity of 390 million sq. ft. LPSA also owns two OSB mills in Chile with a combined annual production capacity of 290 million sq. ft., according to the announcement from the Nashville, Tenn.-based company.