Langley-based Hardwoods Distribution Inc. (TSX: HWD) this morning announced a deal to acquire the business operations of Cincinnati, Ohio-based Frank Paxton Lumber Co. LLC for approximately US$13 million.
Rob Brown, CFO for Hardwoods, called it an “excellent deal” for the company.
“We think it’s a really nice business, it fits very well with our strategy and offers a lot of very good people,” he said. “Frank Paxton is a long-term industry performer – a great name in the industry.”
Brown commented that the deal fits well with a strategic shift Hardwoods has made since end of 2010. Hardwoods is a distributor of hardwood lumber and sheet goods.
“We’d been focusing on expense reduction, which was important in the downturn but now we’ve made a shift to target more in terms of market expansion,” he said.
“To do that, we wanted to diversify our end markets and do more business in commercial and institutional construction markets.”
He added that Harwoods has been looking to expand its customer base for import products and has been targeting growth in big wood-consuming markets.
“Frank Paxton offers all three of those things,” he said. “It’s a great strategic fit for us.”
Brown noted that Frank Paxton has $45 million in annual sales. Last year, he said, Hardwoods did $198 million in sales.
“Thirteen million is a good sized acquisition for us,” he said.
The deal is expected to close on or about September 19 and is subject to satisfaction of final closing conditions by both companies.
Jenny Wagler
Twitter: JennyWagler_BIV