Boise Cascade will purchase two southern engineered lumber facilities.
The Boise-based company will purchase the facilities from Georgia-Pacific for $215 million. The facilities are located in Thorsby, Ala. and Roxboro, N.C. The acquisition is expected to be completed in the first half of 2016 after a regulatory review and the company plans to spend about $85 million in cash and $130 million in new borrowing, according to the company.
Boise Cascade now has four lumber production facilities in Idaho, Oregon, Maine and Louisiana. The new locations will give the company mills near manufacturing facilities in North Carolina and South Carolina. The company said in a prepared release that the new mills will help it capitalize on estimated growth in housing demand in the eastern and southern states.
In a presentation prepared for its investors, Boise Cascade said the rationale for purchasing the new mills rested on cost comparison. Buying is cheaper than building new mills, the company said. Because the mills are located in high resource areas, the company expects increased production that will eventually offset the acquisition cost.
Once the new mills are staffed, Boise Cascade expects to increase production of its LVL Billet beams by 9 million cubic feet and its I-joist capacity by 80 million lineal feet. The company expects mid-cycle revenue growth of $40 million after the acquisition.
From Idaho Business Review: https://idahobusinessreview.com/2016/01/05/boise-cascade-to-purchase-two-southern-sawmills/