In The News
Lumber Agreement Still Isn’t Done
The Canadian government and the U.S. timber industry still have not agreed on a new proposal that would end the softwood lumber trade fight between the two countries.
Canadian trade minister Pierre Pettigrew must decide if Ottawa will agree to the three-year plan, allowing Canadian softwood to be imported into the United States duty free until they comprise a 31.5 percent share of the U.S. lumber market.
Canadian lumber producers disagree on the proposal.
Canfor Corp. of Vancouver, British Columbia, Canada’s largest lumber producer, said that it will not support the proposed out-of-court settlement between Canada and the United States on softwood lumber.
“While the company has supported the need for a negotiated resolution to this dispute, the current settlement framework, including the proposed federal and provincial quota allocation methodologies, is disproportionately punishing to Canfor’s employees, communities, shareholders and customers,” said David Emerson, president and chief executive officer.
Federal Way, Wash.-based Weyerhaeuser Co., which has mills in both the United States and Canada, supports the proposal.
“Weyerhaeuser applauds the governments of both countries for staying at the negotiating table and for agreeing to compromises that we know will be difficult for both sides,” said Steven R. Rogel, chairperson, president and chief executive officer of Weyerhaeuser. “We’ll work hard over the next few weeks to convey our strong support of this proposal to the Canadian and U.S. governments. Ratification is vital if we’re to achieve free trade and stability in the North American lumber business.”
The U.S. government imposed the softwood lumber duties after ruling that Canadian lumber exports to the United States were subsidized, which the Canadian government and producers refute.
|MERGERS, PARTNERSHIPS & ACQUISITIONS
Masonite to Acquire the Entry Door Business of the Stanley Works
Masonite International Corp., headquartered in Mississauga, Ontario, has announced that it has signed a definitive agreement to acquire the residential entry door business of The Stanley Works.
The purchase price is $160 million in cash. The definitive agreement includes a multi-year license for the use of the Stanley Door brand name and related brands by Masonite following closing. Stanley’s entry door business sales are approximately $200 million.
The acquisition is expected to be immediately accretive to Masonite’s earnings per share.
Closing of the transaction is subject to certain governmental approvals, third-party consents and customary conditions, and is anticipated to occur in the first quarter of 2004.
Stanley’s entry door business manufactures and pre-hangs steel and fiberglass residential entry doors and entry systems for sale primarily to the retail home-improvement market in the United States. Stanley’s entry door business, known for its high quality, has facilities in Charlotte, N.C.; Langley, British Columbia; Winchester, Va.; Garland, Texas; and Rancho Cucamonga, Calif.
“We are very pleased with this acquisition for a number of reasons,” said Philip S. Orsino, Masonite’s president and chief executive officer. “The acquisition is a clear continuation of our focused strategy in the door business worldwide. As a result of the acquisition, we expect to achieve substantial operating efficiencies across all our residential door product lines. Stanley’s entry door business accelerates our ‘all-products solution’ initiative. The addition to our existing manufacturing and fabrication facilities of Stanley’s similar facilities will lead to significant efficiencies. Also, the acquisition presents opportunities for more effective global procurement of raw materials, product development and standardization. These initiatives will lower our operating costs and further enhance our already strong capabilities to provide excellent service and the widest product range to our customers. We are very proud to welcome Stanley’s employees, customers and suppliers to Masonite.”
Info circle card #137.
New FMCSA Hours of Service Regulation Effective Next Month
The Federal Motor Carrier Safety Administration’s (FMSCA) new hours of service regulation goes into affect on January 4, 2004.
Under the new regulation, drivers and motor carriers must comply with the following:
• Eleven hours of driving time following ten consecutive hours of off duty;
• No driving beyond the 14th hour after coming on duty, following ten consecutive hours off duty.
Info visit FMCSA’s website at www.fmcsa.dot.gov.
MERGERS, PARTNERSHIPS & ACQUISITIONS
Fortune Brands Completes Acquisition of Therma-Tru
Fortune Brands Inc. recently announced that its Home & Hardware business has completed the acquisition of Maumee, Ohio-based Therma-Tru Corp., a large designer and manufacturer of residential entry doors in the United States.
The addition of the Therma-Tru brand expands the company’s Home & Hardware business, which also includes Moen, MasterBrand cabinets, Master Lock and Waterloo Industries. Therma-Tru Corp.’s annual sales exceed $400 million.
“Therma-Tru is a great strategic fit that will add to our momentum in Home & Hardware and deliver significant value for our shareholders,” said Fortune Brands chairperson and chief executive officer Norm Wesley. “We’re excited to add this innovative and growing number-one brand in an attractive category, a brand that benefits from the same favorable demographics that underpin the growth of our cabinet and faucet brands and a brand that creates opportunities for valuable sales growth and cost synergies within our Home & Hardware business.”
The company expects the acquisition to add approximately 15 cents to earnings per share in the first year. The purchase price was approximately $925 million.
“Our balance sheet and strong cash flow remain powerful assets on behalf of our shareholders,” Wesley added.
Info circle card #138.
Weyerhaeuser Closes Plants
In the past two years, Federal Way, Wash.-based Weyerhaeuser Co. has closed down 28 plants across North America and more than a quarter of the nearly 2,300 layoffs have been in the state of Oregon, according to an article in the Seattle Post-Intelligencer.
The company took over Portland-based Willamette Industries Inc. in 2002, promising that Oregon would not have to absorb the bulk of pending layoffs.
In August 2003, Weyerhaeuser permanently closed its North Bend corrugated-medium cardboard mill and announced it would be closing its Trus Joist engineered-lumber plant in Junction City by the end of 2003.
For more than half of its displaced workers, the company plans to offer
positions at its Trus Joist operations in Eugene and Stayton, Ore.
“The closures are helping Weyerhaeuser shave $300 million in annual operating costs, and the sales of land and mill sites aided the company in reducing its $12.7-billion debt load, most of it taken on in order to buy Willamette,” the article stated.
Seigles Inc. to Acquire Michael Nicholas LLC
Seigle’s Inc., a distributor and manufacturer of building materials in the Chicago area, has announced that it is acquiring Michael Nicholas LLC, one of the area’s carpenter-contractor firms. The company says the acquisition will enable Seigle’s to offer its homebuilding customers supplies, such as lumber, trusses, millwork, windows and cabinetry, plus jobsite supervision and installation. This turnkey package melding supplies and labor will ensure better value and lower overall costs for homebuilders and homebuyers through tighter scheduling, faster completion times and greater accountability, according to the company.
“With major production, homebuilders increasingly demanding single sources of labor and supplies, the combined force of Seigle’s and Michael Nicholas can respond more effectively and faster,” says Seigle’s chairperson Harry Seigle. “We will be, in effect, a general contractor for large homebuilders.”
Info circle card #140.
Martin Millwork and NAMCO Join Forces
Two of New England’s wholesale distributors joined forces this past fall. Martin Millwork, a four-generation family-owned business since 1917, has merged with NAMCO, also a family-owned company founded in 1975.
According to a NAMCO press release, both companies are highly respected suppliers within the industry offering independent retail lumber dealers the finest services and products available. Martin and NAMCO will continue to operate in their existing facilities. The Springfield, Mass., location will be led by Terry Chadbourne, operations manager, Carl Martin IV, sales manager, and in Somerset, by Gary Fox, vice president of operations, and Matthew Curley, director of architectural services and sales.
The merger of these two companies will enable Martin-NAMCO to better serve lumber dealers and millwork houses throughout New England and Eastern New York by combining their product offerings, sales forces, production capabilities and delivery fleets, according to the release.
Info circle card #141.
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