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Canfor subsidiary Vida Group acquires three Swedish sawmills

Canfor Corporation (TSX:CFP) announced today that its 70 per cent owned subsidiary, Vida Group, has entered into an agreement to purchase three sawmills located in Sweden from Bergs Timber for a purchase price of CAD$43 million plus working capital.

“We are excited that Vida’s strong performance and balance sheet has enabled them to grow their operating footprint in Sweden,” said Don Kayne, president and CEO of Canfor.

The three mills, which are located in Vimmerby, Mörlunda and Orrefors, Sweden, will add approximately 215 million board feet to Vida’s annual capacity. With additional investment, Vida anticipates the production capacity of the mills can be increased to 300 million board feet.

After taking into account this additional production capacity, Sweden represents 22 per cent of Canfor’s globally diversified operating platforms, plus 43 per cent in British Columbia, 31 per cent in the Southern U.S. and four per cent in Alberta.

The transaction is expected to close in the third quarter of 2020 and is subject to due diligence, completion of certain transaction documents and other customary closing conditions, including any required regulatory approvals.

Following downtime related to the impacts of the COVID-19 pandemic, Vida is operating at full capacity and Canfor continues to employ variable operating schedules in North America with sawmills in the U.S. operating at almost full capacity and Canadian sawmills operating at approximately 90 per cent effective June 18, 2020.