Stella-Jones Inc. subsidiary, McFarland Cascade Holdings, Inc., has signed a non-binding letter of intent to purchase the shares of Lufkin Creosoting Co., Inc., as the company said in the press release received by Lesprom Network.
Lufkin Creosoting produces treated poles and timbers at its wood treating facility in Lufkin, Texas. Its consolidated sales for the year ended December 31, 2015 reached approximately $34.2 million.
The transaction, if finalized, is expected to close in April 2016 and is subject to customary conditions, including satisfactory due diligence and signature of a definitive share purchase agreement.
Stella-Jones plans to finance the transaction through a combination of debt financing and a vendor note and may consider proceeding with an equity offering depending on market conditions.
Stella-Jones Inc. is a leading producer and marketer of pressure treated wood products.