Nashville, Tennessee, USA, 17 June 2011 -- (BUSINESS WIRE) -- Louisiana-Pacific Corporation (LP) (NYSE:LPX) announced today that its subsidiary, LP South America (LPSA), acquired the remaining 25% equity interest in LP-Brasil OSB Industria e Comercio S.A. (LP Brasil) from Masisa do Brasil LTDA (Masisa-Brasil), a subsidiary of Masisa S.A. in Chile. LP Brasil operates the oriented strand board (OSB) plant in Ponta Grossa, Parana, Brazil.
In 2008, LPSA entered into a joint venture agreement with Masisa-Brasil in which LPSA bought 75% of the plant and related assets. The purchase agreement included a put/call option for the remaining Masisa ownership. On 12 May 2011, Masisa exercised its option to sell its ownership.
LPSA's acquisition of the remaining 25% interest was completed for a purchase price of USD 24 million, including working capital. The acquisition was funded with USD 19.5 million of cash on hand and USD 4.5 million of borrowings under a short-term credit facility with a Chilean bank. LP-Brasil expects to borrow approximately USD 10 million under a term loan from a Brazilian bank in the near future to replenish its South American cash balance.
"The completion of this purchase is an important next step in our strategic focus on growing business in South America," said Rick Olszewski, LP's executive vice president of sales and president of LPSA.
"We have enjoyed a rewarding partnership with Masisa over the last three years of the joint venture," Olszewski continued. "The Brazilian operation has continued to improve and offers strong potential for the future. The Ponta Grossa operations position us to help satisfy the growing need for structural panels in South America and to support the burgeoning demand for affordable housing in Brazil."
The Ponta Grossa OSB plant was placed in service in 2003 and has an annual production capacity of 390 million square feet. LPSA also owns two OSB mills in Chile with a combined annual production capacity of 290 million square feet.
Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials, including OSB, structural framing products, and exterior siding for use in residential, industrial, and light commercial construction. From manufacturing facilities in the United States, Canada, Chile, and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers. Founded in 1973, LP is headquartered in Nashville, Tennessee, and traded on the New York Stock Exchange under LPX. For more information, visit www.lpcorp.com.