Composite deck maker Fiber Composites LLC has agreed to buy Louisiana-Pacific Corp.'s line of wood-plastic composite decking, WeatherBest, and the company's 175,000-square-foot plant in Meridian, Idaho, where it is made.
Terms of the deal, expected to close in the third quarter, were not disclosed.
The deal provides a manufacturing and distribution hub in the western United States for the New London, N.C.-based extruder of Fiberon fence, deck and railing products.
``For the past decade we've been servicing our distribution network from our New London facility,'' said Bill Ross, Fiber Composites' vice president of sales and marketing, in a news release.
``To continue serving customers nationwide, it was imperative that we added both capacity and a regional location in the Western United States. This purchase satisfied both of those requirements immediately,'' Ross said.
Fiber Composites officials plan to keep the WeatherBest brand name and keep that business running as is, marketing director Craig Sherrett said in a July 26 telephone interview.
``We think the brand has some equity,'' Sherrett said. ``It has a good name. It's up there on the list of recognizable brand names. Combining two fairly popular brands will give us more ammunition to tackle the big dogs in the market.''
For LP, this is the second high-profile shedding of a plastic building products operation in as many years. The firm sold its vinyl siding business to Montreal-based Kaycan Ltd. in early 2006.
It is part of a transition to focusing on new construction vs. the repair and remodeling market, said Linda Kerechek, brand manager for LP Building Products' Outdoor Living Group.
LP continues to manufacture oriented-strand board and engineered wood siding and construction products, which are partly made from plastics.
The decking slowdown at LP began earlier this year when the company announced it was curtailing operations at its Selma, Ala., plant in April. That facility remains for sale, though Kerechek said there are interested potential buyers.
Both the Selma and Meridian plants have capacity for about 40 million lineal feet of composite deck board. At the average industry price of about $1.50-$2 per lineal foot, the acquisition of the Meridian plant could potentially yield as much as $60 million to $80 million of new business for Fiber Composites.
Both Fiber Composites and Wilmington, Ohio-based TimberTech Ltd. are private companies and fairly tight-lipped about sales and capacity, though it appears that the WeatherBest acquisition has officially propelled Fiber Composites into the No. 2 position in market share in wood-plastic composite decking, by volume.
Winchester, Va.-based Trex Co. Inc. is the No. 1 market leader and is credited with creating the category.
Steve Van Kouteren, a principal with Exton, Pa.-based building products consulting firm Principia Partners, said he sees the acquisition as a good fit.
``If you look at the winners and losers in composites over the last year or two, who's pulling ahead? Fiber Composites has been strong,'' he said. ``Now they're expanding more, and gaining access to the West, which will probably strengthen their Home Depot business.''
Fiber Composites, LP and Universal Forest Products in Grand Rapids, Mich., manufacture Veranda-brand decking for Home Depot Stores Inc. Now the producers will be just Fiber Composites and UFP.
``WeatherBest is a really strong brand,'' Van Kouteren said. ``They built a strong following. Fiber Composites will re-establish that following. It's a great fit.''
Fiber Composites officials tout that the company is now one of only two composite deck makers with a manufacturing presence in the East and the West.
``With more than 30 manufacturers clamoring for a piece of the ever-growing composite decking market, Fiber Composites is the first manufacturer to begin what most experts predict is a consolidation of a highly fragmented marketplace,'' Fiber Composites' news release said.
``Past building products segments, like siding and windows, all experienced fragmentation during the early years,'' Ross said. ``Eventually, those industries consolidated and the best and strongest companies claimed the majority of market share.''