Doman Building Materials Group Ltd. of Vancouver announced Friday that it has acquired Hixson Lumber Sales of Dallas, which has five locations in Arkansas, for $375 million in cash.
Doman bought all assets of Hixson's group of companies, including inventory, on a cash-free and debt-free basis. The deal is being funded by cash on hand and revolving credit facilities.
Doman is a publicly traded distributor of building materials; Hixson is a wholesale and manufacturing company of lumber and treated lumber. It has locations in Russellville, Plumerville (Conway County), Pine Bluff, Rison (Cleveland County) and Magnolia (Columbia County).
The latter's operations are "highly complementary" to Doman's West Coast operations, without overlap, according to a news release from Doman. The company said the deal will be accretive by over 55% on both earnings per share and free cash flow per share.
The deal also tripled Doman's sales in the U.S. and expanded its offerings, the company said.
"We are very excited with the addition of Hixson to the Doman group of companies," Chairman and CEO Amar Doman said in the release. "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."
The executive said the deal extends its U.S. footprint "from the West Coast and Hawaii across the mainland and into several high growth states in the middle of the U.S." The company operates 32 treating plants with products that include southern yellow pine building materials.