Louisiana-Pacific (LPX) To Divests LP's East River Facility
Zacks Investment Research | Feb 27, 2020 09:41PM ET
In a bid to remove fiber products from portfolio and focus on LP SmartSide strand siding technology, Louisiana-Pacific Corporation (NYSE:LPX) has inked a deal with Maibec to divest LP’s East River facility, located in Nova Scotia, Canada. Following the divestiture, Maibec will also take charge of the assets and brand rights of CanExel — the fiber-based siding product manufactured in the East River facility.
However, terms of the deal were kept under wraps. The deal is expected to occur in the second quarter of 2020.
Executive Vice President & General Manager of Siding Neil Sherman stated, “This strategic decision to remove fiber products from our portfolio allows us to mobilize additional resources, increase focus and commitment for our LP SmartSide strand siding technology, and accelerate growth of LP SmartSide ExpertFinish, our new line of prefinished strand-based siding. The future for SmartSide strand is bright, and we expect great things to come.”
Post the divesture, LP’s Siding business will focus exclusively on meeting high customer demand for its strand-based siding products.
Focus on Siding Business Bodes Well
The company is committed to grow strand Siding revenues in 2020 and beyond. Notably, the Siding unit generated 8% higher revenues during fourth-quarter 2019. The company expects EBITDA margin to be at least 20% in the long term, backed by strength in the Siding segment. Also, it intends to continue investment in selling and marketing of said business in 2020 and beyond. The company expects SmartSide Strand sales growth in the range of 10-12% for 2020.
Price Performance
Coming to price performance, shares of Louisiana-Pacific have rallied 22.9% in the past six months compared with the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.