Boise Cascade scoops up GP's engineered lumber business

Boise Cascade Company has agreed to purchase Georgia-Pacific's engineered lumber business in a move that will strengthen its position in high-growth housing markets.

The engineered lumber production facilities in question are located at Thorsby, Alabama, and Roxboro, North Carolina, and were purchased for $215 million.

"We are pleased to be expanding our engineered wood products business and positioning ourselves to support customers as the U.S. housing recovery continues in the years ahead. The additional engineered lumber capacity at Thorsby and Roxboro fits very well with our existing production facilities and will help us cost effectively deliver products to our customers," said Tom Corrick, CEO of Boise Cascade. 

The Thorsby facility produces laminated veneer lumber (LVL), while the Roxboro facility produces I-joists, as its LVL production assets are currently idled. Ultimately, Boise Cascade expects the acquisition to increase its LVL billet capacity by 9 million cubic feet and I-joist capacity by 80 million lineal feet.

"There are tremendous opportunities to optimize our mill system and realize freight and other cost synergies," added Corrick. "The acquired mills are located in attractive wood baskets with competitive fiber costs and improve our ability to support high-growth housing demand. We expect the acquisition of Georgia-Pacific`s engineered lumber business to add $40 million to our mid-cycle EBITDA."

The transaction is expected to close in the first half of 2016, at which point Boise Cascade plans to invest capital and hire additional employees in order to increase production at the mills.