GRAND RAPIDS, Mich. - UFP Industries (NASDAQ: UFPI), through its subsidiary UFP Packaging (NYSE:PKG), LLC, has acquired the assets of Alabama-based C&L Wood Products, Inc., a manufacturer specializing in pallets and mulch. The transaction, which extends UFP's PalletOne business unit's reach into Northern Alabama and Central Tennessee, was announced today.
C&L Wood Products, which reported sales of $24.8 million over the past twelve months ending November 2024, will continue operations under its current leadership team, including President Henry Bowman and Operations Manager Frank Janek. The acquisition is set to bolster PalletOne's production capabilities and expand its customer base in the region.
Justin Elwell, Executive Vice President of PalletOne, emphasized the strategic importance of the acquisition, citing the opportunity to extend the reach of PalletOne's machine-built pallets and leverage C&L's operational facilities for growth.
Founded in 1975 and later acquired by Henry and Blythe Bowman in 1996, C&L has grown from a small operation with ten employees to a significant enterprise employing approximately 115 people, serving customers within a 150-mile radius.
Henry Bowman expressed enthusiasm for the merger, highlighting the potential for innovation and growth that the combined expertise of both companies' teams could bring to their customers and employees.
UFP Industries, a holding company with subsidiaries in construction, packaging, and retail solutions, is a prominent player in the manufacturing sector, providing a broad range of products for residential, commercial, and industrial applications. The company, established in 1955 and based in Grand Rapids, Michigan, holds a position on the Fortune 500 and is recognized on Industry Week's list of America's Largest Manufacturers. With a healthy 19% gross profit margin and strong return on equity of 14%, InvestingPro analysis suggests the stock is currently undervalued, with 10+ additional ProTips available for subscribers.
This expansion is part of UFP Industries' broader strategy to enhance its product offerings and service capabilities across the United States. The financial terms of the acquisition were not disclosed. The information regarding this acquisition is based on a press release statement.
In other recent news, lumber and paper stocks, including West Fraser Timber Co. Ltd (TSX:WFG)., UFP Industries, Inc., Weyerhaeuser Company (NYSE:WY), Louisiana-Pacific (NYSE:LPX) Corporation, and Interfor (TSX:IFP) Corporation, have seen notable gains. Analysts from TD (TSX:TD) Cowen and Truist have highlighted the sector's move to implement price increases due to rising commodity prices. Major producers, including Cascades Inc (TSX:CAS)., have announced plans to raise containerboard prices starting January 1, 2025, with proposed hikes in the range of $70 to $90 per ton.
On the other hand, UFP Industries Inc. reported a decline in sales and adjusted EBITDA in their Q3 2024 earnings call amidst a slowing economy. Despite a 10% drop in sales to $1.65 billion and a 21% decrease in adjusted EBITDA to $165 million, the company remains optimistic about its long-term growth prospects. UFP Industries is focusing on strategic cost reductions and is prepared to repurchase shares.
These are recent developments that investors should be aware of. It's important to note that while the company faces current challenges, analysts from TD Cowen and Truist predict a potential upside to the fourth-quarter guidance for companies like Louisiana-Pacific and Weyerhaeuser due to the rising commodity prices.
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