Stella-Jones purchases Boatright’s wood treatment facilitiesBy Emily Reed Published 4:01pm Tuesday, May 27, 2014
Canadian company Stella-Jones completed the acquisition of Boatright Railroad Products, with railroad tie treatment facilities in Clanton and Montevallo, on May 22.
The purchase price was $60 million and included facilities that manufacture, sell and distribute creosote and borate-treated crossties, switch ties, tie plugs and bridge timbers for railroads and railroad contractors.
The deal also included about $9 million of inventory.
Stella-Jones financed the transaction through a combination of its existing committed revolving credit facility, which has been increased to $450 million and a 5-year unsecured promissory note of $15 million.
An amount of $20 million is being held in escrow pending the formal title transfer of the Montevallo assets, which shall occur concurrently with the issue to Stella-Jones, of certain governmental permits relating to the facility, according to a release from Stella-Jones.
Boatright posted 2013 sales of $73.5 million.
“The acquisition of these facilities further enhances our range of treated wood products and services to the North American railroad industry,” Stella-Jones President and Chief Executive Officer Brian McManus said in a release. “We expect this transaction to yield synergies and to be immediately accretive to earnings, as we continue to optimize the overall efficiency of our continental network.”
Stella-Jones Corporation is a U.S.-based company out of Pittsburgh, Pa., wholly owned by Stella-Jones Inc., based in Montreal, Quebec.
In March, Stella-Jones Inc. announced the company had entered into a non-binding letter of intent to buy divisions from Boatright.
Earlier this month, Stella-Jones announced plans to acquire the assets of Boatright Railroad Products by the end of May.
Senior Vice President of Engineering and Operations for Stella-Jones Doug Fox said in early May that Stella-Jones purchased the facilities to assist in meeting current demand/capacity constraints in their existing facilities, allowing them to utilize excess capacity at the Montevallo and Clanton facilities.
Fox said Stella-Jones was “vested” in making the facilities grow and meet and exceed all regulatory requirements.
“We will be investing significant capital to upgrade and expand the facilities from their current footprint over the next two years,” Fox said in early May.
As far as employees, the company said they planned to make job offers to the current employees of Boatright on the day Stella-Jones took over the facility.
The Montevallo and Clanton facilities employ roughly 150 individuals altogether.
Stella-Jones Inc. is a producer and marketer of pressure treated wood products.
Stella-Jones Inc. supplies North America’s railroad operators with railway ties and timbers, and the continent’s electrical utilities and telecommunication companies with utility poles.
Stella-Jones also provides residential lumber to retailers and wholesalers for outdoor applications, as well as industrial products for construction and marine applications.
The 400,000-square-feet facility is located on 100 acres at the Chilton County Industrial Park, north of Clanton.
According to the company’s website, facilities in the United States are located in Arlington, Wash.; Bangor, Wis.; Spencer, W.Va.; Russellville, Ark.; Alexandria, La.; Fulton, Ky.; Winslow, Ind.; Warrior, Ala.; Goshen, Va. and McAlisterville and Dubois, Pa.