Wednesday, October 12, 2022
Interfor Corporation reported that it has concluded a deal with a Kilmer Group affiliate to purchase all of the stock stakes in the companies that make up Chaleur Forest Product.
With a combined annual lumber production capacity of 350 million board feet, Chaleur’s two modern and well-capitalized sawmill operations are located in Belledune and Bathurst, New Brunswick. It also runs a woodlands management division that oversees about 30% of the entire Crown forest in Miramichi province.
Anticipated to increase long-term returns
“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 & Chief Executive Officer. “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.”
According to pro forma figures, Interfor will be able to produce 5.1 billion board feet of lumber annually, 44% of which will be produced in the US South, 19% in Eastern Canada, 15% in the US Northwest, 15% in British Columbia, and 7% in Atlantic Canada. Interfor’s earnings will be significantly increased by the acquisition, and both short- and long-term returns are anticipated to be appealing. As per Interfor’s estimation, Chaleur’s mid-cycle EBITDA will be roughly C$50 million annually before synergies, taking into account current run-rate performance and mid-cycle timber pricing. Through integrated purchasing initiatives, reduced general and administrative costs, and merged sales and marketing opportunities, Interfor anticipates generating annual synergies of C$5 million. Within a year after completion, these synergies should be completely realized without the need for further funding.
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Tags: Chaleur Forest Product, interfor corporation, Kilmer Group, Miramichi, woodlands, woodworking, woodworking event, woodworking industry, woodworking USA
