Koppers eyes growth with purchases

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Koppers Inc.'s plan to buy two business units from Osmose Holdings for $460 million will push the Downtown-based company “to the next level” in markets for wood treatment products and railroad industry services, said Walt Turner, president and chief executive.

During a conference call Tuesday with securities analysts to discuss details of the deal that was announced Monday, Mr. Turner said Osmose holds leading positions in supplying wood preservation chemicals and lumber treated for residential uses such as outdoor decks and fences.

Osmose’s railroad services division handles bridge inspections, repairs and construction for prominent rail operators, including Union Pacific, Canadian National Railway and BNSF Railway, Mr. Turner said.

Combined revenues for the units Koppers plans to buy were $390 million in 2013.

Koppers, which makes carbon chemicals in addition to wood treatment chemicals used for railroad crossties and utility poles, had sales last year of nearly $1.5 billion.

“There’s great strategic fit for Koppers’ growth,” said Mr. Turner. “I believe it’s a great opportunity for Koppers to grow profitability and shareholder value.”

Reacting to the news, shares in Koppers were among the top 10 percentage gainers Monday on the New York Stock Exchange. The stock shot up 11 percent, or $4.40, to close at $43.79. On Tuesday, the stock gained 2 cents to close at $43.81.

Osmose is a privately held business based in Buffalo, N.Y., and is owned by investment firm Oaktree Capital Management.

Koppers said the acquisition will be a stock transaction that includes tax benefits of $7 million annually for the next 15 years.

The sale is expected to close in the third quarter.

About 560 people are employed by the Osmose units that Koppers will acquire. They work at eight operating facilities in North America, Europe and the Australia-Asia region, and at several global sales offices.

The deal marks the second acquisition Koppers has made this year. In January, it announced the purchase of the railroad crosstie-treating business of Tolko Industries of British Columbia, Canada, for $29.1 million.

Koppers “will continue to look at the right type of acquisitions to further grow this company,” Mr. Turner told analysts Tuesday.

Joyce Gannon: jgannon@post-gazette.com or 412-263-1580.


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