Stella-Jones Acquires McFarland Cascade

Stella-Jones Inc., a leading North American manufacturer of pressure-treated wood products, announced that it had completed the acquisition of McFarland Cascade Holdings, Inc. for a purchase price of approximately US$250 million. The purchase price was financed through an $80 million private placement of subscription receipts as well as an increase of Stella-Jones' committed revolving credit facility to $350 million. The lending syndicate was led and arranged by HSBC Bank Canada. RBC Capital Markets led a syndicate of underwriters for a private placement of $49 million of subscription receipts, and Stella Jones International S.A. purchased $31 million of subscription receipts on a private placement basis, thereby maintaining its current level of interest in Stella-Jones at 38.7 per cent. The subscription receipts were automatically exchanged for Stella-Jones common shares following completion of the acquisition.

McFarland is one of North America's long-standing suppliers of utility poles and other treated wood products with several wood treating facilities and an extensive distribution network. The acquisition will further increase the range of Stella-Jones' offerings in the North American wood treating industry.

Stella-Jones was represented in-house by Marla Eichenbaum, its Vice-President, General Counsel and Secretary, and, with respect to the acquisition, by Foley & Lardner LLP with a team led by Jim Manzi. With respect to the financings, Stella-Jones was represented by Fasken Martineau DuMoulin LLP, with a team consisting of Daniel Picotte, Peter Villani, Jean Michel Lapierre, Monica Dingle and Anabel Quessy (corporate / securities); Chloé Archambault, Thomas Meagher, Gary Rose and Brent Lewis (banking / financing), Gilles Carli (tax) and Michelle Pockey (environment).

The senior lending syndicate, led and arranged by HSBC Bank Canada, and including HSBC Bank USA, National Association, Bank of America, Laurentian Bank, TD Bank, CIBC, Branch Banking & Trust Company and US Bank, was represented by McCarthy Tétrault LLP, with a team consisting of Mary-Jeanne Phelan and Marjolaine Hémond-Hotte (banking / financing).

The syndicate of underwriters, led by RBC Capital Markets, was represented by Stikeman Elliott LLP, with a team consisting of Warren Katz, Hadrien Montagne, Julien Michaud and Jeremy Sculnick.