Norbord Jumps After Ainsworth Agrees to Takeover: Toronto MoverLiezel Hill
Norbord Inc., a producer of wood sheathing used to build homes, rose the most since March 2012 after rival Ainsworth Lumber Co. agreed to an acquisition by Louisiana-Pacific Corp.
Norbord rose 10 percent to C$29.98 at the close in Toronto, where the company is based.
Louisiana-Pacific agreed to buy Vancouver-based Ainsworth for about C$906 million ($863 million) in cash and stock to add Canadian production of oriented strand board, a plywood substitute, the companies announced yesterday.
Louisiana-Pacific’s “big bet” on oriented strand board should reassure shareholders in Norbord, which also makes the building material, about the market’s fundamentals, Pierre Lacroix, a Montreal-based analyst at Desjardins Securities Inc. said in a note.
Other wood-products companies also gained. Western Forest Products Inc., a Duncan, British Columbia-based forest-products company, and International Forest Products Inc. both rose 4.3 percent.
Louisiana-Pacific, based in Nashville, Tennessee said its paying about 5.7 times Ainsworth’s earnings before interest, taxes, depreciation and amortization. The median Ebitda multiple paid in three comparable deals during the past 10 years was 3.6, according to data compiled by Bloomberg.