News
ACQUISITION: CANFOR BUYS NORTHWOOD FOR $805M

VANCOUVER, BC — Canfor Corporation plans to buy the shares of Prince George, BC-based Northwood Inc. — jointly owned by The Mead Corporation of Dayton, OH, and Nexfor Inc. of Toronto, ON — for $635…

VANCOUVER, BC — Canfor Corporation plans to buy the shares of Prince George, BC-based Northwood Inc. — jointly owned by The Mead Corporation of Dayton, OH, and Nexfor Inc. of Toronto, ON — for $635 million. Canfor will also assume Northwood’s debt of about $170 million, which when factored in brings the total value of the deal to $805 million. Once completed, Canfor will become the largest Canadian producer of kraft market pulp, with an annual capacity of about one million tonnes.

David Emerson, president and chief executive officer, said the deal puts Canfor in a better position to both cut costs and grow in size: “We will significantly increase our scale and enhance our ability to supply quality pulp, paper and wood products to our growing customers around the globe. In addition, we will be able to improve dramatically our cost-competitive position as the two companies operate in close proximity, produce similar product lines and share the same commitments to excellence in forest and environmental stewardship.”

Northwood has a pulp mill in Prince George, BC, with an annual capacity of 535 000 tonnes of kraft pulp; four sawmills, two in Prince George, one in Houston, BC, and one in Upper Fraser, BC, with an annual capacity of about 1.1 billion board feet; and a plywood mill located in Prince George, BC, with an annual capacity of 167 million square feet.

Canfor intends to finance the $635-million purchase price through a combination of debt financing, tendering of public shares and drawing from existing cash. The transaction is subject to normal regulatory approvals, and is expected to close late in the fall.