Boise Cascade Company (NYSE:BCC) saw its shares gain some ground Friday on news it has reached an agreement to acquire Coastal Plywood Company including its two manufacturing locations, from Coastal Forest Resources Company for $512 million. The Company currently plans to fund the transaction and closing-related expenses from its existing cash balances.
Coastal is a provider of quality plywood, lumber, and treated wood products throughout the eastern U.S. The purchase agreement includes its locations in Havana, Florida, and Chapman, Alabama, which employ approximately 750 people.
"This acquisition incrementally expands our veneer capacity in support of our customers," said Boise CEO Nate Jorgensen. "Near term, it provides us the ability to optimize our existing engineered wood products (EWP) asset base. Longer term, we are excited to fully integrate this strategic venture and we intend to invest $50 million into our Southeast operations over a three-year period to further our EWP production capacity."
Coastal CEO Travis Bryant said "Coastal has a long history of manufacturing quality products and a strong reputation in the markets we serve. This transaction represents an opportunity for our talented and dedicated employees to join a dynamic organization, offering them a secure future with great opportunities ahead."
The scope of this transaction does not include Coastal's parent company or timberlands assets. Closing of the acquisition is expected in the third quarter of 2022.
BCC shares picked up 39 cents to $80.56.
