On 5^th October, UPP announced the following corporate activity:

1. Acquisition of 58.3% of Canadian-listed Taiga Building Products (“Taiga”) for C$18.9mn
2. Purchase of C$46.0mn principal amount of 14% unsecured subordinated notes issued by Taiga for C$52.9mn
3. Issue of 1 warrant for every 1 existing ordinary share with an exercise price of SGD0.37

Acquisition of Taiga shares Taiga is the largest independent wholesale distributor of building products in Canada. As a wholesale distributor, Taiga maintains substantial inventories of building products at fifteen strategically located distribution centres throughout Canada and two distribution centres in California. Taiga also owns and operates three wood preservation plants that produce pressure-treated wood products. The acquisition price implies a valuation of C$32.4mn for the entire company. On an earnings basis, this translates to a P/E of c.3x which is very cheap. But there is a reason for that cheapness – ......