Resolute Forest Products Inc. announced it has entered into an agreement to acquire Conifex Timber Inc.'s three sawmills in the U.S. South for $163 million plus working capital delivered at closing, which is currently estimated at $7 million. The three sawmills, with combined production capacity of 550 million board feet, are located in Cross City (Florida), and Glenwood and El Dorado (Arkansas).
"This transaction will provide immediate scale in the attractive U.S. South, with quality assets in a rich fiber basket, close to growing end-markets," said Yves Laflamme, president and chief executive officer. "Scaling our lumber business forms a key part of our stated transformation strategy. This transaction will also diversify our lumber production: when operating to capacity, almost 25% of our production will be in the U.S. South."
The sawmills produce construction-grade dimensional lumber and decking products from locally-sourced southern yellow pine for distribution within the U.S. Production capacity for Cross City is 185 million board feet and it is currently operating on a two-shift basis. Glenwood's capacity is also 185 million board feet and it is operating on a 1.5 shift basis. The El Dorado mill, with capacity of 180 million board feet, was recently idled. ¨
Resolute intends to build on Conifex's significant capital investments in recent years, including $55 million previously invested in El Dorado, $23 million in Glenwood and $12 million in Cross City.
