UPP

UPP: Entered a share purchase agreement comprising the acquisition of a controlling stake (58.3%) in Taiga Building Products for C$18.9m, and unsecured subordinated notes representing 35.7% of outstanding notes in the company for C$52.9m.The acquisition is priced at 2.8x FY3/16 earnings, and the notes will give UPP a before tax yield of 12.2%.Listed on the Toronto Stock Exchange, Taiga owns and operates three wood preservation plants that produce pressure-treated wood products. It is also a wholesale distributor of building materials. It has 15 distributioncentres in Canada and 2 distribution centres in California, USA. Products include panel products, mouldings, doors and other specialty products.Post acquisition, pro forma FY15 EPS for UPP is expected to surge 63% to 2.5¢, translating to a P/E of 10.6x on the current price of $0.265.