International Forest Products Limited (Interfor) has reached an agreement with Ilim Timber Continental S.A. to acquire Tolleson Ilim Lumber Company of Perry, GA.
The Tolleson operations include two sawmills in Perry and Preston, GA, with a combined annual lumber capacity of more than 400 million board feet plus a remanufacturing facility in Perry.
The Tolleson mills were recently ranked as the two lowest cost mills in a survey of US southern pine sawmills. In 2013, Tolleson generated adjusted EBITDA of US$37 million on sales of US$134 million.
The Tolleson mills are located within 75 miles of Interfor's operations at Thomaston and Eatonton, GA, and will create an enhanced platform for Interfor in the US Southeast. It is estimated that the combination of Interfor and Tolleson will generate more than US$5 million in annual synergies through a combination of process optimization, enhancements in logistics and transportation and best-in-class business practices.
Furthermore, the Tolleson mill at Perry has plans underway to increase annualized lumber production by 50 million board feet, beginning in 2015, by upgrading the mill's kilns and increasing the number of operating hours at the facility.
As a result of this transaction, Interfor's annual lumber production capacity will increase by almost 20% to 2.6 billion board feet, placing it in the top five lumber companies in North America.
“This transaction represents a significant step for Interfor,” said Duncan Davies, Interfor's president and CEO. “The Tolleson mills are a great fit with our operations in the US Southeast and provide a larger footprint on which to build our presence in the region. Even more important, from a financial perspective, the transaction will be immediately accretive to Interfor.”