HDI Announces Acquisition of Pacific Mutual Door
Hardwoods Distribution Inc. (“HDI” or the “Company”) announced that it has entered into an agreement to acquire substantially all of the assets, and assume certain liabilities, of Pacific Mutual Door Company (“Pacific”) (the “Transaction”).
Pacific is a wholesale distributor of interior and exterior doors, custom millwork, and other ancillary building products. For the trailing twelve-month period ended July 2019 Pacific’s revenues were US$58 million.
Pacific operates five strategically located facilities in Nashville, TN, Kansas City, MO, Olathe, KS, Osborne, KS, and Albuquerque, NM. It has a diversified sales strategy and its customer base includes general contractors, builders, distributors, and professional dealers. Pacific has been in operation for over one hundred years and is a significant distributor in the markets it serves.
“We are very pleased to announce the acquisition of Pacific Mutual Door and Window, a market leader that operates a highly profitable business model,” said Rob Brown, President and CEO of HDI. “Pacific compliments HDI’s existing door and related millwork business and provides an entry point into the attractive Tennessee and Kansas markets, with minimal customer overlap and alignment of key supplier relationships. The Transaction is immediately accretive to shareholders.”
The purchase price payable by HDI is US$34.5 million and other consideration. Completion of the Transaction is subject to a number of conditions customary for a transaction of this nature. The Transaction is expected to close in October 2019.
“We have been successful with our acquisition strategy having added over $600 million of annual sales in the last eight years. Our acquisitions pipeline remains very active at this time. We will continue to pursue additional transactions that complement our internal growth strategies,” said Mr. Brown.
HDI has received a term sheet from its US bank to increase its existing revolving credit facility (the “Credit Facility”) from US$125 million to US$150 million, to extend the maturity of the facility from July 2021 to October 2024, and to reduce borrowing rates under the facility. The Credit Facility will be used by the Company to pay the purchase price for the Transaction.
HDI is North America’s largest wholesale distributor of architectural grade building products to the residential and commercial construction sectors. The Company operates a North American network of 62 distribution centres, as well as one sawmill and kiln drying operation.
Faiz Karmally – Chief Financial Officer – email@example.com – (604) 881-1982
Source: Hardwoods Distribution Inc.