North Pacific Group, Inc., one of the nation's largest wholesale distributors of wood products, has signed a letter of intent to sell all of its stock to a private equity firm.

The company, headquartered in Tigard, did not name the buyer Thursday, stating only that it was "nationally recognized."

The sale, subject to a number of consents, is expected to be completed in the fourth quarter of 2009, said company spokeswoman Monique Bauer, who declined to release further details.

"We're going through due diligence right now," Bauer said. "We can't release any other information on the deal."

In Oregon and across the country, the housing crisis has taken a toll on the timber industry, from producers to retailers. Wholesale distributors like North Pacific have also been pinched by the economic downturn, with at least two well-known national distributors filing for bankruptcy this year -- Raleigh, N.C.-based Stock Building Supply and Boise-based Building Materials Holding Corp.

But the reason for North Pacific's sale to a private equity firm is not so much the recession as it is the credit crunch, Bauer said Thursday.

North Pacific distributes lumber and other wood products, but also food and agricultural products such as grain and fertilizers, which has helped the company weather the downturn.

"The real reason for the sale is it allows us to grow the company," Bauer said. "It helps us to reduce our reliance on the banking sector."

North Pacific, with more than 30 locations nationwide, is employee-owned, organized as an Employee Stock Ownership Plan since 2005. The company employs more than 550 nationwide, with 185 employees in the Portland area, including a sales and distribution office in Clackamas.

Butch Bernhardt, information service director for the Portland-based Western Wood Products Association, said that wholesale distributors have been feeling squeezed for some time, with increased competition from big box stores which also sell to builders and manufacturers. The association predicts demand for lumber to reach historic lows in 2009, with a slow recovery starting next year.

The interest from a private equity firm may signal potential for growth in the industry.

"They must see some potential," Bernhardt said. "I think the markets are going to come back, but are they going to come back to where they were? Probably not."