Interfor Corporation has reached an agreement with an affiliate of Kelso & Company to acquire 100% of the equity interests of Eacom Timber Corporation.
The purchase price is C$490 million, on a cash and debt free basis, which includes C$120 million of net working capital. In addition, Interfor will assume Eacom’s countervailing (“CV”) and anti-dumping duty deposits at closing, for consideration equal to 55% of the total deposits on an after-tax basis. As of September 30, 2021, Eacom had paid cumulative CV and AD duties of US$150 million.
The acquisition is consistent with Interfor’s growth-focused strategy as a pure-play lumber producer, increasing Interfor’s total lumber production capacity by 25%. On a pro-forma basis, Interfor’s total annual lumber production capacity will increase to 4.9 billion board feet, of which 46% will be in the US South, 16% in the US Northwest, 20% in eastern Canada and 18% in British Columbia.
“This transaction makes Interfor a truly North American lumber producer, with operations in all the key fibre regions on the continent, further diversifying and de-risking our operating platform and enhancing our growth potential and opportunity set,” said Ian Fillinger, President & CEO. “This transformational growth secures a desirable SPF product mix to meet the growing demand of our customers, at a time when SPF fibre supply is under increasing pressure in other jurisdictions in North America and around the world.”
The completion of the acquisition is subject to customary conditions and regulatory approvals for a transaction of this kind and is expected to close in the first half of 2022.
Source: Lesprom Network