The Boral Limited (ASX: BLD) share price is trekking slightly lower today following the company's update on its Australian timber business.
During morning trade, Boral shares are fetching for $7.40, down 0.13%. It's worth noting that its shares are near its 52-week high of $7.43 reached last week.
Image source: Getty Images
Boral agrees to sell timber business
In today's statement, Boral announced it has entered into an agreement with Allied Natural Wood Enterprises (ANWE) to sell its Australian hardwood and softwood timber business.
Headquartered in New South Wales, Australia, ANWE is a leading wood products export marketing and logistics company. ANWE concentrates on the export of woodchip and other wood products to the international markets. The company is part of the Pentarch Group, an established Australian logistics business.
Under the deal, Boral will sell its timber business for $64.5 million. The agreement is subject to the usual customary conditions upon closing the transaction.
The proceeds of the sale will be used to improve the company's net debt position after allowing for reinvestment needs. Any remaining monies left over will be distributed to shareholders.
Boral noted that the divestment is in line with its strategy of focusing on strengthening its core assets and delivering improved returns.
Boral CEO and managing director, Zlatko Todorcevski commented:
The sale of Boral's Timber business represents another important milestone in focusing our portfolio and positioning for the future.
In Australia, our focus is on our leading integrated construction materials business and maturing our adjacent growth strategies such as recycling, waste, supplementary cementitious materials and lower carbon products.
The sale of Boral's Timber business to the Pentarch Group, a private company with growing interests in the forest products sector, is a good outcome for this business and its customers.
The sale is expected to be completed sometime later this year.
Boral share price snapshot
In the last 12 months, Boral shares have continued to accelerate, posting a gain of close to 100%. Year-to-date, the company's share price has jumped around 50% to hit a 52-week high of $7.43 last Wednesday.
Boral presides a market capitalisation of around $8.1 billion, with over 1.1 billion shares on its books.
