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15 July 2016

Hardwoods Distribution Inc. Completes $57.5 Million Bought Deal and $107 Million Acquisition

On June 30, 2016, Hardwoods Distribution Inc. (“Hardwoods”) completed a public offering of subscription receipts (the “Offering”). The offering raised gross proceeds of approximately $57.5 million through the issuance of 3,966,350 subscription receipts, which included 517,350 subscription receipts issued as a result of the underwriters electing to exercise the full over-allotment option.  The Offering was conducted through a syndicate of underwriters led by Cormark Securities Inc. and included Canaccord Genuity Corp., CIBC World Markets Inc., Mackie Research Capital Corp. and Acumen Capital Finance Partners Limited.

On July 15, 2016, Hardwoods completed its acquisition (the “Acquisition”) of substantially all of the assets used in the business of Rugby Acquisition, LLC and its subsidiaries, collectively doing business as “Rugby Architectural Building Products”.  The Acquisition was completed for a purchase price of US$107 million (the “Purchase Price”) plus up to another US$13 million based on future performance.  The Purchase Price was satisfied by a combination of net proceeds from the Offering and new and existing credit facilities.

As a result of the Acquisition, Hardwoods became North America’s largest distributor of high-grade hardwood lumber, sheet goods, architectural millwork and non-structural architectural grade building products to the residential and commercial construction markets. Hardwoods’ operations include a North American network of 62 distribution centres, as well as 1 sawmill and kiln drying operation.

For the Offering and Canadian matters related to the Acquisition, Hardwoods was represented by Farris, with a team led by Trevor Scott that included Ron Dueck (tax), Robert Veitch and Michael Rawluk.

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