Deltic Timber to Take Control of Del-Tin Fiber
On Wednesday, Deltic Timber announced an agreement to buy out the 50% interest in its Del-Tin Fiber joint venture currently held by International Paper subsidiary TIN, The effect of this purchase will be to give Deltic 100% ownership of Del-Tin.
Del-Tin manufacturers medium density fiberboard at a plant in El Dorado, Ark. Specific details on the subsidiary's revenues and profitability were not disclosed, but Deltic did let on that it thinks the purchase will be "accretive to Deltic's financial performance."
Deltic will pay $5.2 million in cash, and assume all of TIN's $14.8 million in debt guarantees on local government bonds that were issued in 1998 to finance construction of the Del-Tin Fiber plant. These bonds mature on December 1, 2027.
Investors reacted positively to the announcement, and Deltic shares are up 1.3% in Thursday trading, at $72.17.
The article Deltic Timber to Take Control of Del-Tin Fiber originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.