The housing and construction slump has hit related industries such as carpet, flooring and windows manufacturers.
But taking what an executive calls a "calculated chance" on the economy's long-term prospects, Georgia-Pacific is buying four compressed board factories from Canada's Grant Forest Products for $400 million.
It's Atlanta-based Georgia-Pacific's biggest acquisition since it became a unit of Koch Industries in 2005.
Grant Forest, based in Earlton, Ontario, is selling the board factories as part of a bankruptcy reorganization for its Canadian operations.
The deal is expected to close in the first half of this year, pending approval from Canadian and U.S. bankruptcy courts.
The compressed board -- or oriented strand board as the product is commonly known -- factories are in Englehart and Earlton, Ontario, and in Allendale and Clarendon, S.C.
Their products are used in residential and commercial sub-flooring, roof sheathing and other building purposes.
Mark Luetters, president of Georgia-Pacific Wood Products division told the AJC the deal makes sense because the assets being bought make products that complement G-P's existing line-up. Also, he said, they are close to key G-P customers, easing delivery logistics.
Although the economy remains shaky, Luetters said Georgia-Pacific's size, private ownership and low debt gives it an advantage in riding out the slump. They also enable the company to make deals such as this one, he said, adding that it's unclear if other large acquisitions are on the horizon this year.
"These are very complementary assets and they'll do well when things are tough," Luetters said. "We'd call it a calculated chance. What we do know is that things will get better."
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