Doman Building Materials Announces Acquisition of Hixson Lumber Sales

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

• Hixson is a leading family-owned lumber and treated wood supplier operating in the Central United States with 19 lumber treating plants, five specialty sawmills and a captive trucking fleet.
  
• Highly strategic acquisition that complements Doman’s existing US West Coast operations with immediate scale in some of the most attractive and fastest growing regions across the United States.
• The Transaction is expected to be more than 55% accretive on both an earnings per share and free cash flow per share basis, using metrics for Hixson that reflect more normalized market and industry conditions.
  

VANCOUVER, British Columbia, June 04, 2021 (GLOBE NEWSWIRE) -- Doman Building Materials Group Ltd. (“Doman” or the “Company”) (TSX:DBM; DBM.NT) is pleased to announce that it has acquired Texas-based Hixson Lumber Sales. The Company acquired all of the assets of the Hixson Lumber Sales group of companies (“Hixson”) for approximately US$375 million in cash, including inventory¹, (the "Transaction"). Hixson is being acquired on a cash-free and debt-free basis, and the Transaction is being funded from the Company’s existing cash on hand and revolving credit facilities.

Hixson is a leading wholesale and manufacturing company of lumber and treated lumber operating in the Central United States. Its operations are highly complementary to the Company’s existing U.S. West Coast operations without overlap. The Transaction will facilitate the Company’s growth, will be immediately accretive and will expand the Company’s product suite to include new offerings.

“We are very excited with the addition of Hixson to the Doman group of companies. The Transaction is a great complement to our existing U.S. operations while further advancing our growth strategy and developing a leadership position in the central corridor of the U.S., in areas such as Texas that continue to have extremely strong growth activity,” said Amar Doman, Chairman and CEO. “We continue our disciplined approach in tracking and executing on accretive growth opportunities, further strengthening our financial performance, and enhancing shareholder value based on a fundamentally sound and sustainable growth plan. With the Transaction, our US footprint now extends from the West Coast and Hawaii across the mainland and into several high growth states in the middle of the US, we proudly operate 32 treating plants across our system, and our product offerings importantly include Southern Yellow Pine building materials.”