NEW YORK (CNNfn) - Premdor Inc., one of the world's top door makers, agreed to buy International Paper Company's high-quality wood product unit Masonite Corp. for $523 million cash Monday, in a widely anticipated move to help reduce raw materials and marketing costs.|
For Chicago-based International Paper, the sale is another step to rid the company of more than $3 billion in non-core assets after its $7.3 billion merger with Champion International.
The $523 million price tag is subject to possible closing adjustments.
Masonite had net sales of $301 million in 1999 and the company is expected to add to Premdor earnings in 2001.
"Following the acquisition, we plan to utilize the Masonite brand name and technology globally, not only in Masonite's existing products but also in new products and product categories while continuing to serve all of Masonite's existing customers," said Philip S. Orsino, Premdor's president and CEO, in a statement.
In early 1999, Masonite and Toronto-based Premdor (PI: Research, Estimates) entered into a strategic alliance designed to reduce costs and increase customer demand for Premdor's products worldwide.
International Paper's chairman and CEO said in a statement the sale proves the company's commitment to selling $3 billion in assets that no longer fit its focus on paper, packaging and forest products.
Shares of International Paper (IP: Research, Estimates) fell 81 cents to $21.88 Monday, while Premdor dropped 6 cents to $7.81.