Brookfield Asset Management Exits Ainsworth Lumber

Louisiana-Pacific Corporation (LP) and Ainsworth Lumber Co. today announced that they have signed an agreement under which LP will acquire all of the outstanding common shares of Ainsworth for a total consideration of C$3.76 per Ainsworth common share or a total equity value of approximately US$1.1 billion. Ainsworth Lumber Co. is 54% owned by Brookfield Asset Management.

Ainsworth is a manufacturer and marketer of oriented strand board (OSB) with a focus on value-added specialty products for markets in North America and Asia. Ainsworth’s four OSB manufacturing facilities, located in Alberta, British Columbia and Ontario, have a combined annual capacity of 2.5 billion square feet (3/8-inch basis), with the potential to increase capacity to 3.1 billion square feet (3/8-inch basis) with the expansion at Ainsworth’s mill in Grande Prairie, Alberta. Ainsworth is headquartered in Vancouver (www.ainsworthengineered.com).

Louisiana-Pacific Corporation (NYSE: LPX) is a manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction. From manufacturing facilities in the US, Canada, Chile and Brazil, LP products are sold to builders and homeowners through building materials distributors and dealers and retail home centers. Founded in 1973, LP is headquartered in Nashville (www.lpcorp.com).

Louisiana-Pacific will finance the cash component of the transaction through a combination of cash on the Louisiana-Pacific and Ainsworth balance sheets and new borrowings. Louisiana-Pacific has obtained a commitment for a senior secured term loan from Goldman, Sachs & Co. and BMO Capital Markets. The company currently plans to have Ainsworth’s current debt remain outstanding.

“This is an excellent transaction that makes LP more valuable for our customers and our shareholders,” said Curt Stevens, LP’s CEO. “Ainsworth has very high quality assets and provides us with an expanded suite of strand-based products and technologies, additional access to key international growth markets, particularly in Asia, and enhanced scale and efficiencies in North America. We have great respect for Ainsworth and its people, and we intend to take the best of both companies to create a leading provider of strand-based products that is well positioned to meet the evolving needs of customers in North America and abroad.”

“The APA (American Plywood Association) consensus projection for U.S. housing starts for the full year 2013 is 957,000, an increase of 23% from 2012. For 2014, the APA consensus projection is approximately 1.2 million starts. We believe the acquisition of Ainsworth provides LP with greater flexibility and exposure to this recovery,” said Mr. Stevens.

LP’s financial advisers are Goldman, Sachs & Co. and BMO Capital Markets. Its legal advisers are Jones Day, Stikeman Elliott LLP, and Orrick, Herrington & Sutcliffe LLP. Ainsworth’s financial adviser is RBC Capital Markets and its legal advisers are Goodmans LLP and Skadden, Arps, Slate, Meagher & Flom LLP.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-5-13