Stella-Jones Inc.

Stella-Jones Inc.

February 28, 2007 13:58 ET

Stella-Jones Announces Completion of U.S. Acquisition

- Second U.S. acquisition for Stella-Jones - Acquisition will be accretive to earnings - Strengthens Stella-Jones' U.S. wood utility pole business

MONTREAL, QUEBEC--(CCNMatthews - Feb. 28, 2007) - Stella-Jones Inc. (TSX:SJ) announced today that its wholly owned US subsidiary, Stella-Jones Corporation, has completed the acquisition of the wood utility pole business of J.H. Baxter & Co. ("Baxter"). This acquisition will establish Stella-Jones' second manufacturing facility in the United States and provide greater access to the U.S. treated wood utility pole market.

"With this acquisition, Stella-Jones further enhances its position as a North American producer of pressure treated wood products" said Mr. Brian McManus, President and Chief Executive Officer of Stella-Jones Inc. "This transaction is consistent with our objective of steadily increasing shareholder value through both top and bottom line growth".

Assets acquired include the Baxter production plant located in Arlington, Washington, its pole peeling facility in Juliaetta, Idaho as well as all inventories and accounts receivable relating to its wood pole business. The Arlington facility will become Stella-Jones' 10th treating plant. The other nine pressure treated wood plants are in the Canadian provinces of British Columbia, Alberta, Ontario, Quebec and Nova Scotia as well as in the state of Wisconsin, U.S.A.

For its last fiscal year ended December 31, 2006, Baxter's sales of wood utility poles were approximately US$30.0 million. The transaction will be immediately accretive to Stella-Jones' earnings. The purchase price totaled US$22.3 million, of which approximately US$12.0 million was for inventory and receivables. Financing for the transaction was provided by a subordinated vendor note of US$8.0 million as well as additional debt funding under existing and new bank facilities.


Stella-Jones Inc. (TSX:SJ) is a leading North American producer and marketer of industrial treated wood products, specializing in the production of pressure treated railway ties as well as wood poles supplied to electrical utilities and telecommunications companies. Other principal products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. The Company also provides treated consumer lumber products and customized services to lumber retailers and wholesalers for outdoor applications. The Company's common shares are listed on the Toronto Stock Exchange.

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Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

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