Bergs Timber signed an agreement with Vida AB on the sale of Bergs’s Swedish sawmill business. The transaction encompasses the sawmills in Orrefors, Vimmerby and Mörlunda, and is scheduled to be concluded on 1 September 2020. All personnel employed at each of these sawmills and in the purchasing organisation for raw materials will be offered employment at Vida, which is also acquiring the assets at the already discontinued operation at Gransjö.
The total purchase consideration for the operations, including the working capital involved, is estimated at approximately SEK 400 million ($43 million), of which SEK 303 million ($32.6 million) pertains to fixed assets. In conjunction with the transaction, an additional SEK 150 million ($16.1 million) in working capital is expected to be freed up. As a result of the sale, Bergs will recognise a capital gain before tax of approximately SEK 100 million ($10.7 million).
The Swedish sawmill business, including the recently discontinued operations in Gransjö, represent annual sales of approximately SEK 1,100 million and over the last five-year period generated an EBITDA-margin between 3-11%. The remaining operations will have net sales of approximately SEK 2,000 million, with a margin that over time has been higher and more stable than that reported by the Swedish sawmill business. After the sale, Bergs will consist of wood processing operations in wood preservatives, planing, buildings, windows, doors, garden products and pellets. In addition, Bergs conducts sawmill business in Latvia and Estonia with annual production of approximately 350,000 cubic metres, as well as harbour and distribution operations in the UK.
The sale is conditional upon Vida obtaining approval from the relevant competition authorities.
Bergs Timber primarily produces and sells structural timber in spruce and pine for several different markets in Europe.
