Canfor enters agreement with Scotch & Gulf Lumber
May 31, 2013, Vancouver, B.C. – Canfor Corporation has entered into a phased purchase agreement with Scotch & Gulf Lumber, LLC.
Based in Mobile, Alabama, Scotch Gulf's primary operations consist of three sawmills in Alabama – one in Mobile, Fulton and Jackson. Together the mills produce Southern Pine dimension lumber products.
The transaction involves the phased purchase by Canfor of Scotch & Gulf over a three-year period, at an aggregate purchase price, excluding working capital, of $80 million.
Canfor's initial 25 per cent interest will increase over the three-year period to 50 per cent after 18 months and 100 per cent at the end of the term.
"This agreement provides access to an exceptional fibre base, increases our Southern Pine production capacity to more than one billion board feet and will improve our ability to serve our U.S. customers," said Don Kayne, Canfor president and CEO.
The transaction is subject to standard closing conditions and is expected to close in the third quarter of 2013.