Interfor To Acquire Chaleur Forest Products
Interfor announced that it has reached an agreement with an affiliate of the Kilmer Group to acquire 100% of the equity interests in the entities comprising Chaleur Forest Products.
Chaleur owns two modern and well-capitalized sawmill operations located in Belledune and Bathurst, New Brunswick, with a combined annual lumber production capacity of 350 MMBF. Chaleur also operates a woodlands management division based out of Miramichi that manages approximately 30% of the total Crown forest in New Brunswick. This division provides a secure source of fiber supply for the sawmill operations as well as a stable, long-term stream of cash flow from third-party log sales, license management fees and silviculture activities.
The purchase price is $325 million Canadian, on a cash and debt free basis, which includes approximately $31 million Canadian of net working capital. In addition, Interfor will assume Chaleur’s countervailing (CV) and anti-dumping (AD) duty deposits at closing, for consideration equal to 55% of the total deposits on an after-tax basis. As of August 31, 2022, Chaleur had paid cumulative CV and AD duties of approximately $82 million USD.
“This acquisition is consistent with Interfor’s growth-focused strategy as a pure-play lumber producer and builds upon our recent expansion into Eastern Canada with further geographic diversity,” says Ian Fillinger, President & CEO. “New Brunswick has a secure, high quality and competitive log supply, a supportive investment environment and proximity to key eastern markets. These are well-managed and efficient mills with a desirable SPF product mix, which fit extraordinarily well within our existing portfolio. Chaleur’s strong management team further bolsters our core lumber strength and we look forward to welcoming the team into our company.”
On a proforma basis, Interfor’s total annual lumber production capacity will increase to 5.1 billion BF, of which 44% will be in the U.S. South, 19% in Eastern Canada, 15% in the U.S. Northwest, 15% in British Columbia and 7% in Atlantic Canada.
Interfor intends to finance the acquisition with a combination of cash on hand and its existing credit facilities. The completion of the acquisition is subject to Canadian and U.S. regulatory reviews and customary conditions for a transaction of this kind and is expected to close in the fourth quarter of 2022.
Latest News
Texas Lumber Industry Employment Decreases, While State Numbers Grow
Despite Hurricane Harvey's creation of hundreds of construction projects, lumber companies in East Texas are still hurting. "I would've called you a liar if you would have told me that when Hurricane Harvey hit that it wouldn't have just blown the mills wide open,"...
Roseburg Forest Products To Acquire Canada’s Pembroke MDF
Oregon-based Roseburg Forest Products recently reached an agreement in principle with Pembroke MDF, Inc. to purchase Pembroke’s medium density fiberboard (MDF) and molding production facilities located in northeastern Ontario, Canada. Upon final due diligence and...
Mississippi’s Jones Lumber Acquires Rives & Reynolds Lumber
Mississippi’s Jones Lumber Acquires Rives & Reynolds LumberJones Lumber Company, the founding organization owned by the Jones Companies in Columbia, MS recently purchased Rives and Reynolds Lumber out of Natchez, MS. This acquisition will allow Jones Lumber...
Find Us On Social
Newsletter
The monthly Timber Processing Industry Newsletter reaches over 4,000 mill owners and supervisors.
Subscribe/Renew
Timber Processing is delivered 10 times per year to subscribers who represent sawmill ownership, management and supervisory personnel and corporate executives. Subscriptions are FREE to qualified individuals.
Advertise
Complete the online form so we can direct you to the appropriate Sales Representative.