Mercer International Inc. has entered into an agreement to acquire substantially all of the assets of one of Germany’s largest sawmills and a bio-mass power plant, near Friesau, Germany for approximately $55.1 million plus defined working capital of approximately $9 million.
The transaction is subject to customary closing conditions, including receipt of requisite regulatory approvals, and is expected to complete around the beginning of the 2Q 2017.
The Friesau Facility has an annual production capacity of approximately 550 million board feet (mmfbm) on a continuously operating basis and 465 million mmfbm on a customary three-shift operating basis.
The Friesau Facility includes a modern bio-mass fueled cogeneration power plant, built in 2009, with an annual production capacity of approximately 13MW of electricity and 49.5MW of thermal energy. The plant sells electricity pursuant to a long-term fixed price green power tariff that runs to 2029.
Mr. David M. Gandossi, CEO, stated: "We are pleased to enter the European lumber sector, with the acquisition of one of Germany’s largest sawmills. The proposed acquisition also expands our existing presence in the bio-mass based electricity market and is in line with our long-term growth objectives.
Mr. Gandossi continued: "This acquisition leverages our core competencies of wood procurement, production optimization and green energy production. We believe it presents a natural fit with our existing procurement activities and our expertise in bio-mass based electricity production."
Mercer International Inc. is a global pulp manufacturing company.