ADENTRA Announces Acquisition of Woolf Distributing Company, Inc.

Acquisition enhances ADENTRA’s product mix and geographic footprint in the Pro Dealer channel

Expected to be immediately accretive to adjusted earnings per share and adjusted EBITDA margin

ADENTRA Inc. (“ADENTRA” or the “Company”) announced that one of its wholly owned subsidiaries has completed the acquisition (“the Acquisition”) of substantially all the assets of Woolf Distributing Company, Inc. (“Woolf”) and has assumed certain working capital liabilities.

“We are pleased to welcome Woolf’s team to ADENTRA,” commented Rob Brown, President and Chief Executive Officer of ADENTRA. “Woolf expands our geographic footprint and product offering, adding complementary millwork locations to our US Midwest operations, as well as new branded specialty products in the outdoor living product category. The addition of Woolf also deepens our access to the attractive Pro Dealer customer channel where ADENTRA expects favorable multi-year demand from new residential and repair and remodel markets, supported by low existing home inventories, favorable demographics, strong home equity levels and an aging US housing stock.”

“We remain committed to our Destination 2028 goals, including the achievement of US$3.5 billion in annual run-rate sales through a combination of organic and acquisitions-based growth. With today’s announcement, we are right on pace to achieve our stated goal of adding US$800 million in run-rate sales from acquisitions by 2028,” said Mr. Brown.

Financial Consideration

The Acquisition of Woolf was completed for an upfront purchase price of US$130 million, financed by the Company’s existing credit facilities. An additional earn-out consideration of US$5 million may be payable related to each of the calendar years ending 2024, 2025 and 2026 contingent upon achieving certain earnings performance targets. Should the additional earn-out consideration become payable, the effective valuation multiple associated with the Acquisition will reduce, making the acquisition even more accretive. On a pre-synergy basis the Acquisition is expected to be immediately accretive to Adjusted EBITDA margin and is anticipated to be high-single digit accretive to adjusted basic earnings per share on a pro-forma basis. Following the acquisition of Woolf, ADENTRA will still have ample access to capital remaining. With a strong balance sheet the Company will continue to be well positioned to act on additional future acquisition opportunities in the highly fragmented architectural building products industry.

About Woolf Distribution Company, Inc.

Woolf is a value-added distributor of architectural building and millwork products for residential and commercial markets, serving customers in seven US states from four facilities located in Northern and Central Illinois, and in Northen Wisconsin. Woolf’s millwork product category includes interior and exterior doors and associated products. Its specialty building materials category is focused on products for outdoor living spaces, including composite decking and composite and aluminum railing. Woolf adds value to millwork products by machining doors to customer specifications, pre-hanging door units in jambs, and pre-finishing millwork products as requested. Its customer base is comprised of professional building materials dealers, one-step distributors, millwork houses, and big box stores. Woolf has a strong culture of customer service, with a long tenured management team led by its President & CEO Mr. Craig Steagall, who will remain with ADENTRA post-acquisition. During the twelve months ended June 30, 2024, Woolf achieved US$164 million in sales.

About ADENTRA

ADENTRA is one of North America’s largest distributors of architectural products to fabricators, home centers, and professional dealers servicing the new residential, repair and remodel, and commercial construction end markets. The Company currently operates a network in North America of 86 facilities in the United States and Canada. ADENTRA’s common shares are listed on the Toronto Stock Exchange under the symbol “ADEN”.

Source: ADENTRA Inc.