Louisiana-Pacific to acquire Ainsworth for $1.1B

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By AP

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Updated: Wed, 04 Sep 2013 07:16:20 EST

NASHVILLE, Tenn. (AP) — Building products company Louisiana-Pacific Corp. said Wednesday that it is buying Ainsworth Lumber Co. Ltd. of Canada for $1.1 billion, a figure that includes the assumption of Ainsworth's debt. The purchase price amounts to CA$3.76 per share (US$3.57 per share). The deal marks a 30 percent premium to Ainsworth's closing price Tuesday of CA$2.89 ($2.75). The transaction has the unanimous support of Ainsworth's board of directors. Private equity funds managed by Brookfield Asset Management Inc., which owns 54 percent of Ainsworth stock, agreed to vote in favor of the deal. Ainsworth is a top manufacturer of oriented strand board, with an annual capacity of 2.5 billion square feet that could be expanded to 3.1 billion square feet if a mill in northern Alberta is expanded. Louisiana-Pacific CEO Curt Stevens said the acquisition will help the company benefit more from the recovery in housing construction. The purchase consists of about 52 percent in cash and 48 percent in Louisiana-Pacific common shares. Following the transaction, funds managed by Brookfield will own about 9 percent of the shares of Louisiana-Pacific. Louisiana-Pacific said it would fund the transaction with a combination of cash on hand and on Ainsworth's books with new borrowings. It has already obtained a commitment for a senior secured term loan from Goldman Sachs and BMO Capital Markets. The transaction is expected to close by the end of the year. Louisiana-Pacific shares rose 74 cents, or 4.9 percent, to $16.01 in after-market trading after the deal was announced.

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