Stella-Jones To Extend U.S. Reach with Tangent Rail Purchase

In a move to expand its penetration of the U.S. railway tie sector, Stella-Jones Inc. has signed a letter of intent to acquire Tangent Rail Corp., a Pittsburgh-based provider of wood crosstie supply chain services. Terms were not disclosed.

Stella-Jones, headquartered in Quebec, is a leading North American producer and marketer of industrial pressure-treated wood products, specializing in the production of railway ties and timbers, as well as wood poles supplied to electrical utilities and telecommunications firms.

Tangent Rail provides the railroad industry with treated wood products, mainly ties, through plants in Warrior, Ala.; Terry Haute and Winslow, Ind.; Alexandria, La., and McAlisterville, Pa. It produces creosote wood preservative at its distilleries in Terry Haute and Memphis.

"The acquisition of Tangent Rail Corp. would considerably enhance our offerings to the U.S. railroad industry, while also extending our geographical reach," said Brian McManus, president and CEO of Stella-Jones.

Tangent Rail is on pace to post 2009 sales of (US) $175 million. Stella-Jones said it hopes to complete the transaction, which is subject to antitrust clearance in the United States as well as customary closing conditions, by the end of the first quarter of 2010.