Ainsworth Lumber to merge with Toronto competitor in $763 million deal

Ainsworth | BCBusiness
Oriented strand board is most commonly used in residential home construction.

One of B.C.’s top five forestry companies to be purchased by Toronto-based Norbord Inc. in all-stock deal

Vancouver-based lumber producer Ainsworth  Lumber Co. will be taken over by Norbord Inc. in a $763-million all-share deal, according to an agreement announced Monday. Norbord will acquire all of Ainsworth’s outstanding shares in a transaction orchestrated by Brookfield Asset Management, which owns a majority stake in both companies. 

The friendly merger will allow the combined company to lower operational costs and expand and increase its product offerings, said Ainsworth CEO Jim Lake in a statement. While Lake will stay on as advisor for six months, current Norbord president and CEO Peter Wijnbergen will head up the combined wood panel company. 

Both Norbord and Ainsworth produce wood-based particle board panels used in residential housing construction and operate plants across North America. Combined, annual sales at the two companies exceeded $1.6 billion last year. Ainsworth’s operates just one mill in B.C.—in 100 Mile House, where the company was founded six decades ago.  

This isn’t the first time Ainsworth has ended up on the sale block. In May, American and Canadian regulators called off Ainsworth’s sale to Louisiana Pacific Corp. due to antitrust concerns. Louisiana-Pacific had intended to purchase the company for $1.1 billion in cash and shares.

Ainsworth’s annual revenues peaked in 2005 at $1.5 billion before it was hit hard by the 2008 recession. Ainsworth’s revenues have increased steadily since then buoyed by the comeback in U.S. housing starts. However, like other B.C. lumber producers, the company suffered in the first half of 2014 due to the 28-day trucking strike at Vancouver’s port and a harsh winter across the U.S., according to Jason Boyer, vice-president of PwC’s deals practice in Vancouver.

Founded by David Ainsworth in 1950, the company remained in family hands until 2008 when creditor Brookfield Asset Management took control of the firm and ultimately forced out the Ainsworth family.