Boise Cascade makes a "Coastal" plywood acquisition

Boise Cascade Company has reached an agreement to acquire Coastal Plywood Company, including its two manufacturing locations, from Coastal Forest Resources Company for $512 million.

The deal and closing-related expenses will be funded by its existing cash balances, Boise Cascade said.

Coastal is a provider of plywood, lumber, and treated wood products throughout the eastern U.S. 

The purchase agreement includes its locations in Havana, Fla., and Chapman, Ala., which employ approximately 750 people.

The transaction does not include Coastal's parent company or timberlands assets. 

"This acquisition incrementally expands our veneer capacity in support of our customers," said Nate Jorgensen, CEO, Boise Cascade. "Near term, it provides us the ability to optimize our existing engineered wood products (EWP) asset base. Longer term, we are excited to fully integrate this strategic venture and we intend to invest $50 million into our Southeast operations over a three-year period to further our EWP production capacity."

Travis Bryant, CEO of Coastal Forest Resources Company, said, "Coastal has a long history of manufacturing quality products and a strong reputation in the markets we serve. This transaction represents an opportunity for our talented and dedicated employees to join a dynamic organization, offering them a secure future with great opportunities ahead."

Closing of the acquisition is expected in the third quarter of 2022, subject to customary closing conditions, including receipt of antitrust approval under the Hart-Scott-Rodino Act of 1976, as amended.

Boise Cascade was advised by Perkins Coie LLP, as outside legal counsel, and Coastal was advised by Harris Williams, as financial advisor, and Hunton Andrews Kurth LLP, as outside legal counsel, in the transaction.

"These are well-invested and managed plants that fit nicely into our existing footprint of integrated facilities in the Southeast," said Mike Brown, executive vice president, Boise Cascade. "We look forward to welcoming the Coastal team to Boise Cascade."

Based in Bosie, Idaho, Boise Cascade is one of the largest producers of engineered wood products and plywood in North America and a leading U.S. wholesale distributor of building products. 

Last month Boise Cascade reported first quarter sales increased 28% to $2.3 billion from sales of $1.8 billion in the first quarter last year.

The company also posted a net income of $302.6 million for the quarter compared to a net income of $149.1 million in the first quarter of 2021.