Press release from CNW Group
Hardwoods Completes Acquisition of Frank Paxton Lumber Company and Amends US Credit Facility
Monday, September 19, 2011
TRADING SYMBOL: Toronto Stock Exchange - HWD
LANGLEY, BC, Sept. 19, 2011 /CNW/ - Hardwoods Distribution Inc. ("Hardwoods") announced today it has completed its previously announced acquisition (the "Acquisition") of the Frank Paxton Lumber Company LLC ("Paxton"). Paxton is a leading remanufacturer and distributor of premium hardwood lumber, millwork and architectural sheet goods, with branch operations located in Chicago, Cincinnati, Denver, Kansas City and San Antonio. The Acquisition was structured as a purchase of assets, principally trade accounts receivable, inventory, and equipment. The purchase price of the acquired assets on the closing date was US$13.9 million.
"We are pleased to have successfully completed the acquisition of Paxton, one of the hardwood industry's premiere distributors," said Lance Blanco, President and CEO of Hardwoods. "We are impressed with the high quality of people and operations that comprise the Paxton business. The Frank Paxton Lumber Company is an excellent fit with Hardwoods market expansion strategies, and we welcome and look forward to working with our new Paxton employees."
Hardwoods also announced today an amendment (the "Amendment") to the revolving credit facility available to its U.S. operating subsidiary, Hardwoods Speciality Products USLP ("Hardwoods USLP"). The Amendment provides the consent of Hardwoods USLP's lender to the Acquisition. The Amendment also increases the maximum borrowings available to Hardwoods USLP under the credit facility, from US$25 million to US$30 million. Increasing the size of the credit facility provides Hardwoods USLP with additional flexibility to borrow against the value of collateral expected to arise from the purchase of the business operations of Paxton.
About Hardwoods Distribution Inc.
Hardwoods Distribution Inc. ("Hardwoods") (TSX: HWD) is a publicly traded company that holds, indirectly, a 100% ownership interest in Hardwoods Specialty Products LP and Hardwoods Specialty Products US LP (collectively, the "Business"). The Business is one of North America's largest distributors of high-grade hardwood lumber and sheet goods to the cabinet, moulding, millwork, furniture and specialty wood products industries. The Business currently operates a network of 31 distribution centers in the U.S. and Canada.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This news release includes forward-looking statements. These involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. Such statements may involve, but are not limited to: our belief the Frank Paxton Lumber Company is an excellent fit with Hardwoods market expansion strategies; and our belief that increasing the size of the credit facility provides Hardwoods USLP with additional flexibility to borrow against the value of collateral expected to arise from the purchase of the business operations of Paxton.
These forward-looking statements reflect current expectations of management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: national and local business conditions; political or economic instability in local markets; competition; consumer preferences; spending patterns and demographic trends; legislation or governmental regulation.
Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, management cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available.
All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as may be required by law, Hardwoods undertakes no obligation to revise or update any forward looking information as a result of new information, future events or otherwise after the date hereof.
For further information:
Chief Financial Officer
Phone: (604) 881-1990
Fax: (604) 881-1995