West Fraser Timber Co. Ltd. has entered into an agreement to acquire the operations of the Gilman Companies from the Howard Gilman Foundation and other shareholders for approximately US$430 million. The Gilman Companies are composed of six sawmills and a fingerjoint mill in Florida and Georgia as well as an administrative office in St. Marys, Ga. The transaction is anticipated to close in the third quarter.
The transaction continues a trend—that had quieted somewhat—of Canadian-based wood products corporations purchasing southern yellow pine sawmills. Counting this transaction, more than 40 SYP sawmills have sold to Canadian counterparts in the past 10 years, mostly to West Fraser, Canfor and Interfor.
The Gilman operations employ 900 and have a combined annual production capacity of 700MMBF. All of the mills produce lumber from southern yellow pine. In the 12 months ended June 30, 2017, the Gilman Companies generated EBITDA of US$67 million on estimated sales of US$330 million.
The acquisition represents a further step in West Fraser’s continuing expansion of its U.S. lumber operations. Upon completion of this transaction, West Fraser will have combined Canadian and U.S. lumber production capacity of 7.2 billion BF. Canadian capacity of spruce/pine/fir (SPF) lumber will represent 57% of capacity and U.S. capacity of southern yellow pine (SYP) lumber will represent 43% of capacity.
“This is a rare opportunity to acquire a U.S. lumber producer of a meaningful scale with high quality facilities and a culture similar to our own,” comments Ted Seraphim, West Fraser president and CEO.
“We are delighted to announce this transaction” said Mary Farrell, President of The Howard Gilman Foundation. “West Fraser is a leader in the North American forest products industry, and through them, we have found a true partner for Gilman Building Products capable of providing strategic expertise and capital to grow and modernize the business.
“The Foundation has been a proud steward of the company for nearly 20 years and believes that a combination with West Fraser will deliver long-term benefits to our loyal and long serving employees and the communities in which we operate,” comments Mary Farrell, president of The Howard Gilman Foundation.
West Fraser intends to finance the acquisition with cash on hand, available lines of credit and a new five-year $200 million credit facility to be made available in connection with the acquisition.
Annual synergies of approximately US$10 million are anticipated to be achieved within three years as a result of this transaction. The synergies are expected to be achieved through non-capital operational improvements and through implementation of best practices. The acquired mills also provide an attractive pipeline of high payback capital projects over the next three to five years, according to West Fraser.
Hunt Forest Products and Tolko Industries Ltd. announced they will build a $240 million sawmill in Bienville Parish, near Taylor, La. Construction is expected to start in early 2022, and the new facility will employ 60 when operations begin in the…
Two longtime Maine family-owned businesses have joined forces as Robbins Lumber, Inc., Searsmont, has announced the acquisition of Limington Lumber Co., East Baldwin. Under the acquisition, Limington Lumber will…
Roseburg Forest Products continues to expand operations in the Southeast U.S. with the recent announcement it will build a 400MMBF annual production capacity, 375,000 sq. ft. facility on 200 acres in Weldon, NC in Halifax County…
U.S. housing starts experienced another month of growth in June 2021, reaching a seasonally adjusted rate of 1.643 million, a 6.3% increase…
Find Us On Social
The monthly Timber Processing Industry Newsletter reaches over 4,000 mill owners and supervisors.
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.
Complete the online form so we can direct you to the appropriate Sales Representative.