Louisiana-pacific Corporation · NYSE:LPX
Louisiana-pacific — Merger or Acquisition (September 2013)
17 slides from Louisiana-pacific's merger presentation, Sep 4, 2013
Slide 1: LP Agrees to Acquire Ainsworth
LP Agrees to Acquire Ainsworth: Advancing Our Global Leadership in Strand- Based Products and Technologies September 4, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements concerning future events and Louisiana-Pacific Corporation's (LP) and Ainsworth Lumber Co. Ltd.’s (Ainsworth) future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Re
Slide 3: Transaction Overview
Transaction Overview § LP to acquire Ainsworth for USD$1.1 billion in cash and shares § Ainsworth owns four operating OSB facilities in Canada: • Operating capacity of 2.5 billion sq. ft. (3/8” basis) • Total potential capacity of 3.1 billion sq. ft. (3/8” basis) § Offer has been unanimously appr
Slide 4: Key Terms of the Transaction
Key Terms of the Transaction § For each Ainsworth share, Ainsworth shareholders may elect to receive either: • C$1.94 in cash and 0.114 LP shares, or • 0.235 LP shares, subject to proration, up to a maximum of 27.5 million LP shares, or • C$3.76 in cash, subject to proration, up to a maximum of C$4
Slide 5: Attractive Offer to Ainsworth Shareholders
Attractive Offer to Ainsworth Shareholders § Attractive and immediate premium to shareholders • 30% over the last closing price and 24% over the 20-day volume-weighted average price on the TSX as of September 3, 2013 § LP shares provide ability to invest in the sector with continued leverage to th
Slide 6: Advancing LP's Global Leadership in Strand-Based Products & Technologies
Advancing LP’s Global Leadership in Strand-Based Products & Technologies § Excellent strategic fit which enhances LP’s Canadian platform and longstanding commitment to Canada § Enhances array of strand-based products and technologies • Entry to new markets and sectors • Access to value-added produ
Slide 7: Excellent Strategic Fit to Better Serve Customer Needs
Excellent Strategic Fit to Better Serve Customer Needs Ainsworth is a leading manufacturer and marketer of OSB, with a focus on value-added specialty products for markets in North America and Asia LP Mill LP Corp. office High Level Ainsworth OSB Mill Peace Valley Ainsworth Corp. office Dawson Creek
Slide 8: Building on LP's Longstanding Commitment to Canada
Building on LP’s Longstanding Commitment to Canada LP has maintained a continuous and growing presence in Canada since 1978 LP Mill LP Corp. office Peace Valley Dawson Creek Golden Swan Valley St. Prime Chambord Larouche Maniwaki East River Montreal § 1,200 Canadian employees; one-third of North Am
Slide 9: Enhances Array of Value-Added Products & Technologies
Enhances Array of Value-Added Products & Technologies § Ainsworth enhances LP’s value-added product capabilities such as: • Combating moisture-induced swelling in floor underlay • Oriented strand lumber (OSL) § More than half of Ainsworth’s production in 2012 was for value-added and strand-based e
Slide 10: Expanded Access to Growing Markets in Asia
Expanded Access to Growing Markets in Asia § LP will benefit from access Ainsworth’s Distribution of Shipments to Ainsworth’s customer and Based on the 12 months ended June 30, 2013 marketing relationships in the growing Asian market, particularly Japan • Ainsworth is the principal OSB provider to
Slide 11: Further Positions LP to Benefit from Recovery in U.S. Housing Market
Further Positions LP to Benefit from Recovery in U.S. Housing Market § A leading participant in the housing upturn • Enhances leverage to U.S. housing recovery US Housing Starts • Significant capacity to meet future demand in all segments • Enhanced logistics and distribution • Strong sales and mar
Slide 12: Large Average OSB Mill Size and Potential For Additional Low-cost Capacity
Large Average OSB Mill Size and Potential For Additional Low-cost Capacity to Drive Industry- Leading Margins Louisiana-Pacific Grande Prairie, AB 730,000 (msf-3/8”) Ainsworth High Level, AB 860,000 (msf-3/8”) Source: Public company filings 12
Slide 13: Ability to Increase Capacity
Ability to Increase Capacity North American OSB Capacity 14% § Expansion of Ainsworth’s Grande Prairie mill (Grande Prairie II) 48% provides the option of incremental OSL or OSB capacity in the west • Approximately 1 year to complete after decision is made to proceed § Provides options for additio
Slide 14: Larger Mills, Higher Value-Added Product Mix Reduces Cost Structure
Larger Mills, Higher Value-Added Product Mix Reduces Cost Structure, Drives Higher Margins North American OSB Mill EBITDA(1) Margin (%) Source: Public company filings 1Ainsworth EBITDA = Adjusted EBITDA before all SG&A; Louisiana-Pacific EBITDA = OSB Segment Adjusted EBITDA (excludes corporate alloc
Slide 15: Transaction Funding
Transaction Funding Estimated Sources & Uses of Cash ($ in millions) Sources of Cash Uses of Cash Balance Sheet Cash $375 Cash Consideration1 $445 New Debt $100 Estimated Transaction Costs $30 Total Sources of Cash $475 Total Uses of Cash $475 ¹ Based on C$1.94 cash per share and approximately 241mm
Slide 16: Q&A
Ainsworth’ Q&A
Slide 17: Appendix: Ainsworth – Four Operating Plants & Employees
Appendix: Ainsworth – Four Operating Plants & 700 Employees Location Annual Capacity Situation (msf-3/8”) 100 Mile House, BC 440,000 Operating Grande Prairie, AB 730,000 Operating High Level, AB 860,000 Ramping up Barwick, ON 510,000 Operating Grande Prairie II, AB 600,000(1) Planning Total 3,140,00
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