LUMBERYARDS

LP agrees to acquire Ainsworth

BY HBSDealer Staff

Nashville, Tenn.-based building materials giant Louisiana-Pacific Corp. agreed to buy Ainsworth Lumber Co. of Canada for about $1.1 billion. 

Vancouver, B.C.-based Ainsworth makes oriented strand board (OSB) and specialty products. 

“Ainsworth has very high quality assets and provides us with an expanded suite of strand-based products and technologies, additional access to key international growth markets, particularly in Asia, and enhanced scale and efficiencies in North America,” said Curt Stevens, LP’s CEO. “We have great respect for Ainsworth and its people, and we intend to take the best of both companies to create a leading provider of strand-based products that is well positioned to meet the evolving needs of customers in North America and abroad.”

Stevens said the deal is timed to take advantage of the housing market recovery. He pointed to the consensus projection for U.S. housing starts to rise to 957,000 in 2013, an increase of 23%. For 2014, the expectations are for 1.2 million starts. 

“We believe the acquisition of Ainsworth provides LP with greater flexibility and exposure to this recovery,” he said.

Ainsworth’s CEO Jim Lake said, “This transaction provides immediate value and liquidity to our shareholders as well as the opportunity to participate in LP’s continued growth as a global leader in strand-based products and technologies.”

LP’s first investment in Canada was in 1978, and it currently employs more than 1,200 people across the country, representing one-third of its total North American workforce.

The proposed transaction, which has a total value of approximately USD$1.1 billion, including the assumption of debt less Ainsworth’s estimated cash balance, represents a premium for Ainsworth shareholders of 30% relative to the closing price of Ainsworth shares of C$2.89 and 24% to the volume weighted average trading price of Ainsworth shares on the TSX over the past 20 trading days as of Sept. 3.

 

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Preliminary approval from judge in Trex class action settlement

BY Steph Koyfman

Hagens Berman Sobol Shapiro, LLP, one of the firms representing plaintiffs in the case, announced Tues. that a settlement was reached in the Mahan v. Trex Company, Inc. class action settlement.

United States District Court Judge Jeffrey S. White issued a preliminary approval of the settlement on Aug. 27, though the Court has not decided in either party’s favor.

The agreement will involve $8.25 million paid to class members to settle claims related to defective products, though the company maintains its denial of the accusations.

“Our decision to settle the case is by no means an admission of any of the allegations made by the plaintiffs,” Trex chairman, president and CEO Ronald Kaplan told Plastics News. “This settlement allows our company to avoid additional expensive, time-consuming litigation and to focus on delivering quality products and service to consumers, while providing certain relief to those customers affected by these issues.”

Complaints were registered against Trex for widespread defects in its composite decking, railing and fencing products. Plaintiffs claimed to experience a host of problems, including mold and discoloration. 

This is the second class action lawsuit Trex has faced in recent years, with consumers filing a similar complaint in 2007 due to defects that included mold, discoloration, flaking and shredding.

Class members include customers in the U.S. who own Trex decking, railing or fencing built with Trex non-shelled product purchased between Aug. 1, 2004 and Aug. 27, 2013.

 

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Deere reviewing its options for John Deere Water

BY HBSDealer Staff

Deere & Company is in the process of reviewing its strategic options for its John Deere Water irrigation operations.

Deere stated that it remained commmitted to effective water management and its important role in global agriculture. Deere intends to continue offering products and services in this area, as well as enhancing existing products such as John Deere Field Connect, its in-field moisture sensing and climate monitoring system.

Deere has been working in the irrigation products market for the past seven years and is a prominent manufacturer of full-line drip irrigation products.

The company has retained Bank of America Merrill Lynch as its exclusive financial advisor during this period. A formal decision has yet to be made.

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