Parr Lumber opens new location
Parr Lumber, the Pacific Northwest-based pro dealer, has announced plans to open another lumberyard on Dec. 14, 2011. The new location, in Marysville, Wash., will feature a 20,200-sq.-ft. warehouse on 4.4 acres, office space and 1,500 sq. ft. of retail space.
Doug Nelson, former manager of Parr Lumber in Everett, Wash., is the new general manager. The Marysville facility, Parr’s sixth location in Washington, will replace the Everett store. The company hopes to expand deeper into Washington and last year opened a lumberyard in Spokane, in the eastern region of the state.
Headquartered in Hillsboro, Ore., Parr Lumber operates 38 facilities in Oregon, Washington and Arizona. The family-owned operation consists of six companies: Parr Lumber, Parr Cabinet Outlets, Cascade Wholesale Hardware, Northwest Structural Components, Northwest Structural Components Installation and the Parr Marketing Group.
Resolute Forest Products makes takeover bid for Fibrek
Resolute Forest Products has announced its intention to acquire all the issued and outstanding common shares of Fibrek Inc. The offer of C$1 per share in cash, or C$0.55 in cash and 0.0284 of a Resolute Forest Products common share will expire on or before Dec. 31.
According to Resolute, the offer represents a premium of approximately 39% over the closing price of Fibrek’s shares on Nov. 28, and a premium of approximately 31% over the volume-weighted average trading price of the shares on the Toronto Stock Exchange or the 20 trading days ending on that date.
The maximum amount of cash available will be approximately C$71.5 million, and the maximum number of Resolute shares to be issued will be approximately 3.7 million shares. Shareholders holding approximately 46% of Fibrek have already committed to tender their shares, according to Resolute.
"The acquisition of Fibrek is consistent with our strategy," said Richard Garneau, president and CEO of Resolute. “As we continue to focus on building a sustainable and profitable company, growth in expanding global pulp markets is the right move, at the right time, for Resolute Forest Products. The range of optimization opportunities that we expect from this acquisition will, over time, deliver value to our shareholders."
Noting that the unsolicited offer “appears opportunistic,” Fibrek has issued a statement urging its shareholders to delay taking any action until its board of directors can fully evaluate Resolute’s offer.
The board is evaluating other strategic alternatives, it said. "The consideration offered under the Resolute proposal does not capture Fibrek’s true value for its shareholders," said Pierre Gabriel Côté, president and CEO of Fibrek.
Fibrek is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien, Quebec; Fairmont, W.Va.; and Menominee, Mich. It supplies various sectors of the paper industry mainly in Canada, the United States and Europe. Fibrek trades on the Toronto Stock Exchange under FBK.
Resolute is a global supplier in the forest products industry with a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. Resolute owns or operates 18 pulp and paper mills and 23 wood product facilities in the United States, Canada and South Korea.
Marketing its products in close to 90 countries, Resolute has third-party certified 100% of its managed woodlands to sustainable forest management standards. The shares of Resolute trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. BMO Capital Markets is acting as financial adviser to Resolute, while UBS is acting as financial adviser to a special independent committee of the board of Resolute.
Builders FirstSource secures $160 million
Dallas-based Builders FirstSource announced the completion of a $160 million first-lien Term Loan financing agreement with affiliates of Highbridge Principal Strategies.
The company also announced it had entered into a standalone letter of credit facility with SunTrust Bank, which provides for the issuance of up to $20 million of letters of credit.
With the proceeds, the LBM dealer intends to repay the $20 million outstanding under the current revolving credit facility, use $14.2 million to collateralize letters of credit outstanding under the new LC Facility, and pay fees and expenses related to the transaction.
"This financing transaction strengthens our liquidity and positions us to take full advantage of the expected recovery in housing," said Floyd Sherman, Builders FirstSource CEO.
Sherman added that improvement in 2011 financial results allowed the deal to happen — sales in November have exceeded the company’s expectations.
"Our sales results through November have exceeded our expectations, delaying the anticipated seasonal reduction in working capital typically seen by this point in the year," Sherman said. "Our liquidity has also enabled us to take advantage of opportunistic inventory buys to protect customer pricing as we head into 2012."
Upon receipt of the $119.6 million in net proceeds related to this transaction, Builder FirstSource’s cash balance was about $150 million, and net liquidity was about $115 million after giving effect to a $35 million minimum cash requirement contained in the term loan.