Norbord and Ainsworth to Merge to Create Global OSB Leader

Published on : Tuesday, December 9, 2014

norbordNorbord Inc. and Ainsworth Lumber Co. Ltd. has recently announced that they have signed a definitive agreement under which they will merge to create a leading global wood products company focused on oriented strand board (“OSB”) across North America, Europe and Asia.

 

The combination of Norbord and Ainsworth will create one of the largest and lowest-cost  globally, with a portfolio of high-quality assets that produce a wide range of products for residential, industrial and specialty applications. The transaction is a compelling strategic fit and offers shareholders, customers, employees and other stakeholders of both companies a significant opportunity owing to the highly complementary nature of the respective operations.

Under the terms of the arrangement agreement announced, Norbord has agreed to acquire all of the outstanding common shares of Ainsworth in an all-share transaction in which Ainsworth shareholders will receive 0.1321 of a Norbord share for each Ainsworth share pursuant to a plan of arrangement under the British Columbia Business Corporations Act. The transaction value represents a premium of 15% to Ainsworth’s 20-day volume weighted average price (VWAP), and the transaction has been unanimously approved by the Independent Committees and Boards of Directors (with directors of each company affiliated with Brookfield Asset Management Inc. (“Brookfield”) abstaining) of both Ainsworth and Norbord. This all-share transaction structure will allow both Norbord and Ainsworth shareholders to participate in the significant synergies and other benefits expected to result from this combination.

 

Brookfield and its affiliated entities, which control approximately 55% and 52% of the outstanding common shares of Ainsworth and Norbord respectively, have entered into a binding agreement in which they have committed to vote in favour of the transaction. Upon closing, the Brookfield entities will control approximately 53% of the outstanding common shares of the combined company.

 

On a pro forma basis, the combined company generated USD $1.63 billion in sales and USD $143 million in Adjusted EBITDAi for the 12 months ended September 27, 2014. The transaction is expected to be accretive to earnings and cash flow in the first


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