Star Equity Holdings Announces Acquisition of Timber Technologies

Core Viewpoint - Star Equity Holdings, Inc. has successfully acquired Timber Technologies, LLC, enhancing its position in the engineered wood products market and significantly improving cash flow [2][5]. Transaction Highlights - The acquisition of Timber Tech, effective May 17, 2024, is valued at $23 million, which includes$16 million in upfront cash, $4 million in deferred cash, and a$3 million earn-out [8]. - Timber Tech reported revenue of $18.8 million and Adjusted EBITDA of$5.5 million for the full year 2023, indicating a strong financial performance [5][18]. - The acquisition is expected to diversify Star's Building Solutions division and leverage Timber Tech's established market presence in the Midwest and Northwest [5][6]. Company Background - Timber Technologies, founded in 2003, specializes in manufacturing glue-laminated timber products (glulam) for various applications, including agriculture, industrial, and construction [4][9]. - The company operates a 69,000 square foot facility in Colfax, Wisconsin, which will be acquired alongside the business [7]. Financial Details - Star has secured a $7 million term loan from Bridgewater Bank to partially finance the acquisition, with a fixed interest rate of 7.85$5.4 million and $6.0 million for the first and second years post-acquisition, respectively [8]. Strategic Implications - The acquisition aligns with Star's strategy to expand its market reach and enhance profitability through organic growth and further acquisitions [5][10]. - Co-owners of Timber Tech will remain in their current roles, ensuring continuity in operations and management [8].