Hardwoods Distribution acquires Hardwoods of Michigan in Clinton for US$15.4M, funds purchase with amendment to US credit facility increasing maximum borrowings to US$79.1M from US$50M
LANGLEY, British Columbia
April 28, 2014
– Hardwoods Distribution Inc. ("Hardwoods" or the "Company") announced today the acquisition of the business operations (the "Transaction") of Hardwoods of Michigan, Inc. ("HMI"). HMI is a fully integrated producer of high quality hardwood lumber from its sawmill and kiln drying operations located on 23 acres in Clinton, Michigan. HMI has been in business for over 40 years and has a broad and diverse customer base throughout North America as well as in Europe and Asia. HMI sells hardwood lumber to customers that manufacture cabinets, flooring, furniture, mouldings, doors, windows and other custom millwork products.
"HMI is our third completed acquisition in the past two and a half years, and is expected to bring approximately $33 million in additional revenues per year. When combined with our previous purchases of a lumber importer in North Carolina in May 2013, and the Frank Paxton Lumber Company ("Paxton") in September 2011, we have added an estimated $100 million in additional annual sales from acquired businesses to complement our organic market growth opportunities."
"We believe that the addition of HMI fits well with the Company's existing operations and strategy," commented Mr. Blanco. "HMI is a well-run company that comes with a strong management team. The acquisition of HMI builds upon the expertise in value-added manufacturing that we have developed since acquiring Paxton in 2011. Access to HMI's high quality manufactured products will also allow us more flexibility through our entire branch network to meet the evolving product needs of Hardwoods customers. In addition, HMI has a significant customer base of production cabinet manufacturers which represents an attractive potential segment for Hardwoods to sell its well established import products into."
"Although quarter-to-quarter fluctuations may arise, we continue to have a positive outlook for our industry and the Company's ability to incrementally improve its financial performance," added Mr. Blanco. "We will continue to pursue our strategy of leveraging our import product sourcing capabilities, growing our commercial business, and pursuing select acquisition opportunities that support our objectives."
About Hardwoods Distribution Inc.
Hardwoods Distribution Inc. (TSX: HWD) is one of North America's largest wholesale distributors of hardwood lumber and related sheet good products, operating a network of 32 distribution centres in the US and Canada.