Interfor to buy N.B.’s Chaleur Forest Products for $325M
October 3, 2022 By Interfor Corporation
Interfor Corporation announced today that it has reached an agreement with an affiliate of the Kilmer Group to acquire Chaleur Forest Products.
Chaleur owns two modern and well-capitalized sawmill operations located in Belledune and Bathurst, New Brunswick, with a combined annual lumber production capacity of 350 million board feet. Chaleur also operates a woodlands management division based out of Miramichi that manages approximately 30 per cent of the total Crown forest in New Brunswick. This division provides a secure source of fibre supply for the sawmill operations as well as a stable, long-term stream of cash flow from third-party log sales, licence management fees and silviculture activities.
The purchase price is $325 million, on a cash and debt free basis, which includes approximately $31 million of net working capital. In addition, Interfor will assume Chaleur’s countervailing (CV) and anti-dumping (AD) duty deposits at closing, for consideration equal to 55 per cent of the total deposits on an after-tax basis. As of August 31, 2022, Chaleur had paid cumulative CV and AD duties of approximately US$82 million.
“This acquisition is consistent with Interfor’s growth-focused strategy as a pure-play lumber producer and builds upon our recent expansion into Eastern Canada with further geographic diversity” said Ian Fillinger, president and CEO. “New Brunswick has a secure, high quality and competitive log supply, a supportive investment environment and proximity to key eastern markets. These are well-managed and efficient mills with a desirable SPF product mix, which fit extraordinarily well within our existing portfolio. Chaleur’s strong management team further bolsters our core lumber strength and we look forward to welcoming the team into our company.”
The completion of the acquisition is subject to Canadian and U.S. regulatory reviews and customary conditions for a transaction of this kind and is expected to close in the fourth quarter of 2022.
Chaleur’s operations were not damaged or impacted by Hurricane Fiona in any way.
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