Universal Forest Products, Inc.
) is all set to restructure a part of its long-term debt as the
company recently announced its loan agreement with Prudential
The company issued notes worth $75 million, comprising $35
million of 10-year 3.89% Series A Senior Notes and $40 million of
unsecured 3.98% 12-year Series B Senior Notes. The proceeds
received from Prudential Investment Management will be utilized
primarily for refinancing $40 million of the company's 6.16%
Series 2002-A Senior Notes.
Moreover, a portion of the proceeds will be utilized for repaying
debts related to the Nepa Pallet and Container Co. acquisition
while funds for the acquisition of Custom Caseworks, Inc. will
also come from the same source. The latter specializes in the
manufacturing of point-of-purchase and commercial store fixtures,
commercial casework and office furniture, laminated and painted
wood panels, and OEM-manufactured and private label products.
Both the acquisitions, Nepa Pallet and Container Co. and
Custom Caseworks Inc., are in accordance with the company's
expansionary policy - development of industrial business, entry
into market without adding capacities and to grow through
Universal Forest Products Inc. manufactures, treats,
distributes, and installs lumber, composite wood, plastic and
other building products. The current Zacks Consensus Estimate for
the fourth quarter 2012 is 2 cents while that for 2012 and 2013
are $1.20 and $1.81, respectively, reflecting year-over-year
growth of 273.4% for 2012 and 51.5% for 2013.
We currently have an Underperform recommendation on Universal
Forest while the stock also bears a Zacks #5 Rank, implying a
short-term Strong Sell rating. The company competes with the
Bluelinx Holdings Inc.
), among the other players of the industry.
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