Montreal, Quebec, Canada, 11 October 2011 -- (Marketwire) -- Stella-Jones Inc. (TSX: SJ.TO - News) today announced that it has signed a nonbinding letter of intent to acquire Thompson Industries, Inc., a provider of treated wood products to the railroad industry.
The letter of intent contemplates a total purchase price of approximately USD 41.0 million. The transaction, if finalized, is expected to close in December 2011 and is subject to customary closing conditions, including entry into a definitive purchase agreement and satisfactory due diligence. Stella-Jones plans to finance the acquisition through existing credit facilities.
Founded in 1981, Thompson produces treated wood products, mainly railway ties and timbers, at a facility located in Russellville, Arkansas. Thompson's sales for its fiscal year ended 30 September 2011 are expected to reach approximately USD 49.0 million.
"The acquisition of Thompson Industries would further enhance Stella-Jones' product and service offering to the North American railroad industry," said Brian McManus, president and chief executive officer of Stella-Jones. "Thompson enjoys solid business relationships and is well recognized for its high-quality operations."
Stella-Jones is a leading producer and marketer of pressure treated wood products. The company supplies North America's railroad operators with railway ties, timbers, and recycling services; and the continent's electrical utilities and telecommunications companies with utility poles. Stella-Jones also provides industrial products and services for construction and marine applications, as well as residential lumber to retailers and wholesalers for outdoor applications. The company's common shares are listed on the Toronto Stock Exchange.