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Boise Cascade (BCC) to Acquire Coastal, Expands Veneer Capacity
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Boise Cascade Company (BCC - Free Report) recently inked a buyout deal with a quality plywood, lumber, and treated wood products provider — Coastal Plywood Company — for $512 million. The deal is subject to certain closing adjustments. The agreement includes two manufacturing locations in Havana, FL, and Chapman, AL, which currently employ approximately 750 people.
The deal is expected to close in the third quarter of 2022. Boise Cascade plans to fund the transaction and closing-related expenses from its existing cash balances.
Nate Jorgensen, BCC’s CEO, noted, "Near term, it provides us the ability to optimize our existing engineered wood products (EWP) asset base. Longer term, we are excited to fully integrate this strategic venture and we intend to invest $50 million into our Southeast operations over a three-year period to further our EWP production capacity."
BCC has been focusing on business expansion via various buyouts and mergers. The company benefits from its growth strategy that aims at increasing sales and multiple capabilities.
On Jan 4, 2022, Boise Cascade announced the expansion of its Building Materials Distribution (BMD) operations in Minnesota and Northern Kentucky. Again on Nov 4, 2021, it announced the expansion of the Ohio Valley BMD network, which will be built on a 20-acre site in Marion and include a 100,000 sq. ft. warehouse with 13 acres of lumber storage.
This leading producer of engineered wood products and plywood is experiencing steady demand across product lines and strong pricing on engineered wood and general line products. Also, the company has been working on cost-saving moves to mitigate exposure to commodity price declines that are helping it generate strong earnings.
It expects demand to remain strong throughout 2022. Limited availability of new and existing home inventory and the age of the U.S. housing stock will continue to provide a favorable backdrop for residential construction and repair-and-remodel spending, thereby benefiting the company’s top and the bottom line.
Image Source: Zacks Investment Research
Boise Cascade’s shares have gained 8.5% so far this year against the Zacks Building Products - Wood industry’s 24.4% fall. Also, earnings estimates for 2022 have moved up 22.3% in the past 60 days, indicating 2.6% year-over-year growth.
Key Picks
Louisiana-Pacific Corporation (LPX - Free Report) is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products and exterior siding for residential, industrial and light commercial construction. It operates through four segments: Siding, Oriented Strand Board, Engineered Wood Products and South America.
Louisiana-Pacific, a Zacks Rank #2 company, has an expected earnings growth rate of 6.4% for the current year.
Weyerhaeuser Company (WY - Free Report) is one of the leading U.S. forest product companies. The company has been benefiting from solid new residential construction activity, which is leading to improved demand. Also, its focus on operational excellence has been advantageous over time.
Weyerhaeuser's, which currently sports a Zacks Rank #1, 2022 earnings moved up to $3.20 per share from $2.70 in the past 60 days.
Jacksonville, FL-based Rayonier Inc. (RYN - Free Report) is a leading pure-play timberland REIT. With a solid portfolio of timberlands in some of the most productive timber-growing regions of the Southern United States, Pacific Northwest and New Zealand, RYN is well-positioned to capitalize on the robust domestic demand trends. This will help the company improve the export market conditions and create a favorable pricing environment. RYN is also focused on adding high-quality timberlands to its portfolio through acquisitions.
The consensus estimate for this Zacks Rank #2 player’s 2022 earnings has witnessed an upward revision to 65 cents from 62 cents in the past 30 days.
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Boise Cascade (BCC) to Acquire Coastal, Expands Veneer Capacity
Boise Cascade Company (BCC - Free Report) recently inked a buyout deal with a quality plywood, lumber, and treated wood products provider — Coastal Plywood Company — for $512 million. The deal is subject to certain closing adjustments. The agreement includes two manufacturing locations in Havana, FL, and Chapman, AL, which currently employ approximately 750 people.
The deal is expected to close in the third quarter of 2022. Boise Cascade plans to fund the transaction and closing-related expenses from its existing cash balances.
Nate Jorgensen, BCC’s CEO, noted, "Near term, it provides us the ability to optimize our existing engineered wood products (EWP) asset base. Longer term, we are excited to fully integrate this strategic venture and we intend to invest $50 million into our Southeast operations over a three-year period to further our EWP production capacity."
Shares of this Zacks Rank #2 (Buy) company declined 3.7% on Jun 10. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BCC has been focusing on business expansion via various buyouts and mergers. The company benefits from its growth strategy that aims at increasing sales and multiple capabilities.
On Jan 4, 2022, Boise Cascade announced the expansion of its Building Materials Distribution (BMD) operations in Minnesota and Northern Kentucky. Again on Nov 4, 2021, it announced the expansion of the Ohio Valley BMD network, which will be built on a 20-acre site in Marion and include a 100,000 sq. ft. warehouse with 13 acres of lumber storage.
This leading producer of engineered wood products and plywood is experiencing steady demand across product lines and strong pricing on engineered wood and general line products. Also, the company has been working on cost-saving moves to mitigate exposure to commodity price declines that are helping it generate strong earnings.
It expects demand to remain strong throughout 2022. Limited availability of new and existing home inventory and the age of the U.S. housing stock will continue to provide a favorable backdrop for residential construction and repair-and-remodel spending, thereby benefiting the company’s top and the bottom line.
Image Source: Zacks Investment Research
Boise Cascade’s shares have gained 8.5% so far this year against the Zacks Building Products - Wood industry’s 24.4% fall. Also, earnings estimates for 2022 have moved up 22.3% in the past 60 days, indicating 2.6% year-over-year growth.
Key Picks
Louisiana-Pacific Corporation (LPX - Free Report) is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products and exterior siding for residential, industrial and light commercial construction. It operates through four segments: Siding, Oriented Strand Board, Engineered Wood Products and South America.
Louisiana-Pacific, a Zacks Rank #2 company, has an expected earnings growth rate of 6.4% for the current year.
Weyerhaeuser Company (WY - Free Report) is one of the leading U.S. forest product companies. The company has been benefiting from solid new residential construction activity, which is leading to improved demand. Also, its focus on operational excellence has been advantageous over time.
Weyerhaeuser's, which currently sports a Zacks Rank #1, 2022 earnings moved up to $3.20 per share from $2.70 in the past 60 days.
Jacksonville, FL-based Rayonier Inc. (RYN - Free Report) is a leading pure-play timberland REIT. With a solid portfolio of timberlands in some of the most productive timber-growing regions of the Southern United States, Pacific Northwest and New Zealand, RYN is well-positioned to capitalize on the robust domestic demand trends. This will help the company improve the export market conditions and create a favorable pricing environment. RYN is also focused on adding high-quality timberlands to its portfolio through acquisitions.
The consensus estimate for this Zacks Rank #2 player’s 2022 earnings has witnessed an upward revision to 65 cents from 62 cents in the past 30 days.