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Management Side
Stella-Jones Completes U.S. Acquisition
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Montreal, Quebec, Canada, 28 February 2007--(CCNMatthews) - Stella-Jones Inc. (TSX:SJ) announced today that its wholly owned U.S. subsidiary, Stella-Jones Corporation, has completed the acquisition of the wood utility pole business of J.H. Baxter & Co. This acquisition will establish Stella-Jones' second manufacturing facility in the United States and provide greater access to the U.S. treated wood utility pole market.

"With this acquisition, Stella-Jones further enhances its position as a North American producer of pressure treated wood products" said Brian McManus, president and chief executive officer of Stella-Jones Inc. "This transaction is consistent with our objective of steadily increasing shareholder value through both top and bottom line growth".

Assets acquired include the Baxter production plant located in Arlington, Washington, its pole peeling facility in Juliaetta, Idaho, as well as all inventories and accounts receivable relating to its wood pole business. The Arlington facility will become Stella-Jones' 10th treating plant. The other nine pressure treated wood plants are in the Canadian provinces of British Columbia, Alberta, Ontario, Quebec, and Nova Scotia, as well as in the state of Wisconsin, USA.

For its last fiscal year ended 31 December 2006, Baxter's sales of wood utility poles were approximately USD 30.0 million. The transaction will be immediately accretive to Stella-Jones' earnings. The purchase price totaled USD 22.3 million, of which approximately USD 12.0 million was for inventory and receivables. Financing for the transaction was provided by a subordinated vendor note of USD 8.0 million as well as additional debt funding under existing and new bank facilities.

Stella-Jones Inc. (TSX:SJ) is a leading North American producer and marketer of industrial treated wood products, specializing in the production of pressure treated railway ties and wood poles supplied to electrical utilities and telecommunications companies. Other principal products include marine and foundation pilings, construction timbers, highway guardrail posts, and treated wood for bridges. The company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. The company's common shares are listed on the Toronto Stock Exchange.

For more information, visit www.stella-jones.com.

 

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