A day after reporting its third quarter 2012 financial
Universal Forest Products Inc.
) communicated a major news that is in accordance with the
company's expansionary policy - development of industrial
business, entry into market without adding capacities and to grow
through acquisitions. The news will likely help overcome the 12%
fall in shares witnessed after the earnings release.
One of Universal Forest's operating companies, UFP Washington,
LLC, has signed agreements to acquire the operating assets of
Nepa Pallet and Container Co., Inc. The addition of these assets
will broaden Universal Forest's portfolio and help the company
strengthen its foothold in the Northwest United States.
The acquisition is expected to be complete by early November,
Nepa Pallet, with facilities in Snohomish, Yakima and
Wenatchee, is a well known manufacturer of pallets, containers
and bins for agricultural and industrial customers. Sales in the
trailing twelve months were approximately $25 million.
This acquisition is Universal Forest's second purchase in year
2012. Earlier, a subsidiary of the company had acquired some
assets of Haleyville, Ala.-based MSR Forest Products, LLC. MSR
Forest is a supplier of roof trusses and cut-to-size lumber to
the region's manufactured housing producers.
In a separate release, the company announced that its board of
directors approved payment of 20 cents per share as a semi-annual
dividend on December 15, 2012, to shareholders of record on
The Zacks Consensus Estimate for the fourth quarter 2012 is 7
cents while that for 2012 and 2013 are $1.36 and $1.93,
respectively, reflecting year-over-year growth of 323.4% for 2012
and 42.4% for 2013.
Universal Forest Products Inc. manufactures, treats,
distributes, and installs lumber, composite wood, plastic and
other building products. The company competes stiffly with peers
Bluelinx Holdings Inc.
Builders FirstSource Inc.
We currently have a Neutral recommendation on Universal Forest
while the stock also bears a Zacks #3 (Hold) Rank.
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