Star Equity Holdings Announces Acquisition of Timber Technologies

Enters Engineered Wood Products Market

Substantially Improves Cash Flow

OLD GREENWICH, Conn., May 20, 2024 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star” or the “Company”), a diversified holding company, announced today it has completed the acquisition of Timber Technologies, LLC (“Timber Tech”), a Wisconsin-based engineered wood products manufacturer, effective May 17, 2024.

Transaction Highlights

• $23 million cash-free, debt-free purchase price.
• $23 million includes: $16 million in upfront cash; $4 million in deferred cash; and a $3 million, 2-year earn-out payable 50% in cash and 50% in shares of STRRP preferred stock.
• Earn-out Adj. EBITDA targets are $5.4 million and $6.0 million for years 1 and 2, respectively.
• Associated real estate will be acquired in June 2024 for $3 million in a separate transaction.
• Closed $7 million term loan from Bridgewater Bank to partially finance the acquisition.
• Co-Owners/Operators, Tom Niska and Dale Schiferl, will stay with the business in their current roles.

Founded in 2003, Timber Tech manufactures glue-laminated timber products (“glulam”) for various end markets and applications, including agriculture, industrial, infrastructure, and building construction (commercial and residential). Its glulam products have superior strength, durability, and environmental sustainability compared to solid timber and other building materials. Operating in a niche industry and benefiting from secular tailwinds, Timber Tech’s glulam products have been taking market share from less sustainable building materials such as steel, concrete, and aluminum.

Rick Coleman, CEO of Star, commented, “The acquisition of Timber Tech marks a significant step forward in Star’s expansion strategy – it diversifies Star’s Building Solutions division end markets beyond multi-family and residential construction, and its strategic location allows for collaboration with Star’s existing Minneapolis metro area businesses, EdgeBuilder and Glenbrook. Financially, Timber Tech brings a 20-year history of consistent profitability and strong cash generation, which we anticipate will greatly improve Star’s overall profitability. Of note, for full year 2023, Timber Tech had revenue of $18.8 million¹ and Adjusted EBITDA of $5.5 million.”