Kadant to Acquire Carmanah

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Kadant Inc., Westford, Mass., USA, has agreed to acquire Carmanah Design and Manufacturing Inc., Surrey, B.C., Canada, for C$54 million in cash (approximately $52 million), subject to a post-closing adjustment. Carmanah designs and manufactures stranders and related equipment used in the production of oriented strand board (OSB), an engineered wood panel product used primarily in home construction. Carmanah also supplies debarking and wood chipping equipment used in both the forest products and the pulp and paper industries.

"I'm pleased to extend our presence into the forest products industry with the acquisition of Carmanah," said Jonathan W. Painter, president and CEO of Kadant. "Carmanah is the world leader in stranding equipment and we expect that the company will make a strong contribution to our business in 2014 and beyond. Industry analysts expect the annual growth rate of OSB production to be just under 10% per year over the next five years in North America. With more than 70% of Carmanah's business coming from parts and consumables, this acquisition will also advance our strategic plan to increase our aftermarket revenues."

Carmanah has 73 employees and generated approximately C$7 million of EBITDA, including C$1 million of non-recurring expenses, on revenues of C$29 million for its fiscal year ended March 31, 2013.

Kadant is a supplier to the global pulp and paper industry. Its stock-preparation, fluid-handling, and doctoring, cleaning, and filtration products are designed to increase efficiency and improve quality in pulp and paper production. Many of its products, particularly in its Fluid-Handling product line, are also used to optimize production in other process industries. In addition, the company produces granules from papermaking byproducts for agricultural and lawn and garden applications. The company had revenues of $332 million in 2012 and 1,600 employees in 17 countries worldwide.

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