KEY POINTS:
Wood products company Tenon is buying out the remaining quarter of Southwest Mouldings of Texas.
Tenon is the company left over after a selldown of Fletcher Forest assets, and the NZX-listed firm has a number of wood-processing sites and investments in building product distributions chains in the United States.
It will acquire half of the remaining 24.5 per cent minority from two senior managers in Southwest on October 1, with the balance to be acquired in two equal tranches, on January 1 and April 1 next year.
The aggregate purchase price is about US$8.6 million.
The funding, which has been agreed with Tenon's bank syndicate, will come from the company's existing financing facility.
Tenon first bought 51 per cent of Southwest in 2005, and bought a further 24.5 per cent in 2007.
Chief executive Mark Eglinton said that since the original investment Tenon had been committed to owning 100 per cent of Southwest.
"The business is a natural extension of our distribution activities and continues to provide us with a market leadership position in the large Texas market."
Having full ownership of Southwest would enhance Tenon's ability to extract group-wide synergies through its one-company initiatives, which, independent of Southwest, were already well on track towards the goal of an aggregate US$5 million of annualised savings within the next two years.
- NZPA
