Koppers To Buy Osmose's Wood Preservation & Railroad Services Units For $460 Mln

(RTTNews) - Koppers Holdings Inc. (KOP), a producer of carbon compounds and treated wood products, announced Monday that its subsidiary, Koppers Inc, has signed an agreement to acquire the Wood Preservation and Railroad Services businesses of Osmose Holdings Inc. The base purchase price for Wood Preservation and Railroad Services businesses or the Acquired Businesses is $460 million and is subject to certain closing adjustments.

The base purchase price includes the value of an anticipated 338(h)(10) tax election that is expected to provide cash tax savings of approximately $7 million annually over the next 15 years.

Revenues for the Acquired Businesses in 2013 were approximately $390 million.

Koppers said it plans to finance the purchase through new and existing bank debt, including a new term loan and an increase to the company's existing revolving credit facility. The transaction is expected to close in the third quarter of 2014, subject to regulatory filings and customary closing conditions.

Osmose's Wood Preservation business is a developer, manufacturer and marketer of wood preservation chemicals and wood treatment technologies. The business has operations and sales in North America, Latin America, Europe, and Australasia, and accounted for approximately $350 million of the Acquired Business' revenue in 2013. The business's products serve a diverse range of end-markets including infrastructure, residential and commercial construction, and agriculture.

Osmose's Railroad Services business is a provider of railroad infrastructure services, including bridge inspection, engineering, maintenance and repair, and construction services for the Class I and shortline railroads in North America. The business accounted for $40 million of revenue in 2013.