Interfor Corporation has reached an agreement with Georgia-Pacific Wood Products LLC and GP Wood Products LLC to acquire four of its sawmill operations located in Bay Springs, Mississippi; Fayette, Alabama; DeQuincy, Louisiana and Philomath, Oregon. The total purchase price of $375 million, which includes working capital, will be funded entirely from cash on hand.
“This acquisition enhances Interfor’s growth-focused strategy as a pure-play lumber producer, and provides significant economies of scale given the complementary geographic fit with our existing US operations,” said Ian Fillinger, President and CEO.
The sawmill operations have a combined annual lumber production capacity of 720 million board feet. The Bay Springs, Fayette and Philomath sawmills are currently operating on a full-shifting basis. The DeQuincy sawmill, which was idled in May 2020 during the COVID-19 pandemic, has an annual capacity of 200 million board feet. Interfor is currently evaluating its strategy and options for the site, including re-start plans.
On a pro-forma basis, Interfor’s total annual lumber production capacity will increase to 3.9 billion board feet, of which 3 billion board feet, or 77% will be US-based and not subject to softwood lumber duties.
Interfor’s US South production capacity will grow by 500 million board feet, or 29%, to 2.2 billion, while production capacity in the US Northwest will grow by 220 million, or 40%, to 770 million board feet. Following the transaction, 57% of Interfor’s production capacity will be in the US South, 20% will be in the US Northwest and the remaining 23% will be in British Columbia.
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 3Q 2021.
Interfor is a growth-oriented forest products company with operations in Canada and the United States.
