RE:We just got bought out!!!LP Agrees to Acquire Ainsworth, Advancing Its Global Leadership in Strand-Based Wood Products and Technologies 09/04/2013 04:20 PM ET
NASHVILLE, TENNESSEE AND VANCOUVER, BRITISH COLUMBIA, Sep 04, 2013 (Marketwired via COMTEX News Network) -- Louisiana-Pacific Corporation (NYSE: LPX) and Ainsworth Lumber Co.
Ltd. (TSX: ANS) -
Transaction Highlights:
-- Excellent strategic fit provides enhanced scale, greater access to Asian markets, and a more diverse product mix -- Enables LP to better serve customer needs with an expanded geographic footprint and a broader array of strand-based technologies -- LP committed to building on its 35 year history in Canada through continued investment in R&D, people and communities -- Provides value to Ainsworth's shareholders, and the opportunity to participate in a stronger combined company well-positioned for continued growth -- Unanimous support of the Ainsworth Board of Directors and Ainsworth's largest shareholder group, private equity funds managed by Brookfield Asset Management Inc. which owns 54% of Ainsworth -- Joint investor conference call today at 5:15 pm ET -- Joint media conference call today at 6:15 pm ET
Louisiana-Pacific Corporation ("LP" or the "Company") and Ainsworth
Lumber Co. Ltd. ("Ainsworth") today announced that they have signed a
definitive agreement under which LP will acquire all of the
outstanding common shares of Ainsworth for a total consideration
which equates to C$3.76 per Ainsworth common share, based on the
closing price of LP common shares on September 3, 2013.
The proposed transaction, which has a total value of approximately
USD$1.1 billion, including the assumption of debt less Ainsworth's
estimated cash balance, represents a premium for Ainsworth
shareholders of 30% relative to the closing price of Ainsworth shares
of C$2.89 and 24% to the volume weighted average trading price of
Ainsworth shares on the TSX over the past 20 trading days as of
September 3, 2013. The proposed transaction has the unanimous support
of the Ainsworth Board of Directors. Additionally, private equity
funds managed by Brookfield Asset Management Inc., (the "Brookfield
Funds") which own 54% of Ainsworth, have entered into an agreement to
vote in favor of the transaction.
Ainsworth is a leading manufacturer and marketer of oriented strand
board ("OSB") with a focus on value-added specialty products for
markets in North America and Asia. Ainsworth's four OSB manufacturing
facilities, located in Alberta, British Columbia and Ontario, have a
combined annual capacity of 2.5 billion square feet (3/8-inch basis),
with the potential to increase capacity to 3.1 billion square feet
(3/8-inch basis) with the expansion at Ainsworth's mill in Grande
Prairie, Alberta.
"This is an excellent transaction that makes LP more valuable for our
customers and our shareholders," said Curt Stevens, LP's CEO.
"Ainsworth has very high quality assets and provides us with an
expanded suite of strand-based products and technologies, additional
access to key international growth markets, particularly in Asia, and
enhanced scale and efficiencies in North America. We have great
respect for Ainsworth and its people, and we intend to take the best
of both companies to create a leading provider of strand-based
products that is well positioned to meet the evolving needs of
customers in North America and abroad."
Added Mr. Stevens: "The APA consensus projection for U.S. housing
starts for the full year 2013 is 957,000, an increase of 23% from
2012. For 2014, the consensus projection is approximately 1.2 million
starts. We believe the acquisition of Ainsworth provides LP with
greater flexibility and exposure to this recovery."
Ainsworth's CEO Jim Lake said, "This transaction provides immediate
value and liquidity to our shareholders as well as the opportunity to
participate in LP's continued growth as a global leader in
strand-based products and technologies. For our people, this will
bring even greater financial strength to the business and the
opportunity to become an important part of a well-resourced,
innovative company with an excellent operational track record and an
uncompromising commitment to safety. This is a positive step forward
for Ainsworth, our people, our customers and the communities in which
we operate."
Investing in Canada and the Canadian Forest Products Industry
LP's first investment in Canada was in 1978, and it currently employs
more than 1,200 people across the country, representing one-third of
its total North American workforce. The Company now owns a total of
seven wholly-owned facilities - OSB mills, siding manufacturing
facilities and engineered wood products manufacturing facilities - in
British Columbia, Manitoba, Quebec and Nova Scotia. LP is also a
joint venture participant in two manufacturing facilities in Quebec,
and it maintains a Canadian administrative office in Montreal,
Quebec. LP maintains one of the industry's best safety ratings across
all of its operations and has a strong track record of environmental
stewardship in all jurisdictions in which it operates.
LP is also fully committed to Ainsworth's interest in Interex Forest
Products, a member-owned international exporter of wood products, and
expects this transaction will significantly increase sales volumes
handled by the Vancouver-based company.
Over the longer term, LP views the acquisition of Ainsworth as a
platform for continued growth in Canada. To support that growth, the
Company expects to increase its investments in infrastructure,
training, and the research and development of innovative strand-based
technologies and products at its Canadian facilities.
LP has a proud history of being a strong and contributing member of
the communities in which it operates. The Company expects to maintain
and expand upon Ainsworth's existing community investment programs in
British Columbia, Alberta and Ontario.
Financial Highlights (1)
On a pro forma basis, the combined company generated approximately
USD$2.5 billion in sales, USD$300 million in income from continuing
operations, and adjusted EBITDA from continuing operations of USD$575
million for the 12 months ended June 30, 2013. The transaction, which
aligns with LP's existing growth strategy, is expected to be
accretive to earnings and cash flow in the first year.
The total consideration will consist of approximately 52% cash and
48% LP common shares. Ainsworth shareholders will have the ability to
choose whether to receive, in exchange for each Ainsworth common
share, either: (i) C$1.94 in cash and 0.114 LP common shares; or (ii)
0.235 LP shares; or (iii) C$3.76 in cash, subject to pro ration under
total aggregate cash and share consideration of approximately C$467
million and approximately 27.5 million LP shares, respectively, based
on the number of Ainsworth common shares outstanding. The Brookfield
Funds have agreed to elect to receive 0.114 LP common shares and
C$1.94 in cash per Ainsworth common share held by them. Following the
close of the transaction, the Brookfield Funds will own approximately
9% of LP common shares outstanding.
LP will finance the cash component of the transaction through a
combination of cash on the LP and Ainsworth balance sheets and new
borrowings. LP has obtained a commitment for a senior secured term
loan from Goldman, Sachs & Co. and BMO Capital Markets. The Company
currently plans to have Ainsworth's current debt remain outstanding.
(1) Financial figures should be read in connection with the Form 8K
filed by LP on September 4, 2013
Additional Transaction Details
The transaction will be carried out by way of a court-approved plan
of arrangement and will require the approval of at least 66 2/3% of
the votes cast by Ainsworth shareholders at a special meeting
expected to take place in October 2013. The Ainsworth Board of
Directors has received an oral fairness opinion from RBC Capital
Markets to the effect that as of the date thereof the consideration
to be received under the transaction is fair, from a financial point
of view, to Ainsworth shareholders. The transaction does not require
the approval of LP shareholders.
In addition to Ainsworth shareholder and court approvals, the
transaction is also subject to other customary conditions, including
the receipt of regulatory approvals (which include the expiration of
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended, and the issuance of rulings and
approvals required under Canadian competition laws and the Investment
Canada Act). Subject to obtaining the aforementioned approvals, the
transaction is expected to close by the end of the year.
Further information regarding the transaction will be included in an
information circular to be filed and mailed to Ainsworth shareholders
in September 2013. Copies of the arrangement agreement and the
information circular will be available online at
www.ainsworthengineered.com and www.sedar.com. The arrangement
agreement provides for, among other things, the payment to LP of a
termination fee of C$32.5 million if the proposed transaction is not
completed under certain circumstances.
Advisers
LP's financial advisers are Goldman, Sachs & Co. and BMO Capital
Markets. Its legal advisers are Jones Day, Stikeman Elliott LLP, and
Orrick, Herrington & Sutcliffe LLP. Ainsworth's financial adviser is
RBC Capital Markets and its legal advisers are Goodmans LLP and
Skadden, Arps, Slate, Meagher & Flom LLP.
Conference Call Details
Joint Investor Conference Call
LP and Ainsworth will host a conference call for the investment
community today, September 4, at 5:15pm ET.