Canfor sells Peace Valley OSB
Canfor Corporation announced that it has entered into a Letter of Intent with Louisiana-Pacific Corporation to sell Canfor's 50 percent share in the Peace Valley Oriented Strand Board (OSB) joint venture in Fort St. John, B.C.
By completing this sale, LP will become the sole owner of the Peace Valley OSB mill.
“This transaction is part of Canfor re-profiling our assets to focus on lumber, pulp and paper manufacturing” stated Canfor President and Chief Executive Officer Don Kayne. “We have enjoyed a very positive relationship with LP and will continue to provide fibre resource management for the Peace Valley facility.”
The purchase price is estimated at $75 million CDN including working capital. In addition, Canfor may receive additional annual consideration over a 3 year period based on Peace Valley OSB’s annual EBITDA.
Canfor and LP currently jointly run the mill, with LP providing operational support while Canfor provides labour, fibre resource management and administrative services. Canfor will continue to provide fibre resource management and temporarily provide administrative services during the transition.
The completion of this transaction is expected to occur by the end of this year, but is subject to the parties executing a definitive agreement and customary regulatory approvals.
The Peace Valley mill has an annual production capacity of 820 million square feet of OSB. It currently operates three shifts with plans to add a fourth shift in the first quarter of 2013 depending on market conditions.