November 15, 2018 – Canfor Corporation has announced it will purchase 70 per cent of the VIDA Group for 3,990 million Swedish Krona (approximately CAD$580 million).
The transaction will be on a cash and debt free basis, which includes CAD$125 million (70 per cent) of normalized working capital. The current owners of VIDA will retain a 30 per cent interest and continue to manage the day-to-day business.
VIDA is Sweden’s largest privately owned sawmill company, operating nine sawmills in southern Sweden with an annual production capacity of 1.1 billion board feet. All of the sawmills produce spruce and pine products, and are strategically located in high-quality and sustainable fibre regions of Sweden. In addition, VIDA has nine value-added facilities that include premium packaging, modular housing, industrial products and energy.
“With the acquisition of VIDA, we are excited to become a truly international manufacturer and provider of wood product solutions for our global customers,” says Don Kayne, president and chief executive officer of Canfor. “This transformational growth will allow Canfor to further diversify and secure a worldwide fibre supply to meet the growing demand of our customers for high-quality wood products.”
He adds, “VIDA, a well-known brand in its current markets, is aligned with our corporate strategy of producing high-value products, providing an exceptional customer service experience and maintaining a low-cost structure.”
Santhe Dahl, group CEO, and Måns Johansson, deputy CEO of VIDA will maintain their leadership of the company in Sweden.
“We have known Canfor for a long time as a high-quality manufacturer and provider of wood product solutions. We are proud to announce that we are now becoming part of a global operation together with Canfor. This will allow us to continue to strengthen and develop the VIDA brand on a global scale,” says Dahl.
In conjunction with the Elliott Sawmilling Company Inc. acquisition announced last week, this acquisition is a positive step forward in our diversification strategy for our operations, products and customers. After taking into account the full impact of VIDA and Elliott, Canfor’s annual production capacity will be approximately 7.2 billion board feet, with a highly diversified operating base in western Canada, the U.S. and Europe.
The purchase price represents a 5.7 times EBITDA multiple based on VIDA’s 2018 projected EBITDA of approximately CAD$145 million, before taking account of estimated annual synergies of CAD$20 million, projected to be achieved through marketing opportunities arising from the increased global scale of the business.
The company anticipates being able to finance this transaction with cash and liquidity on hand but will complete an extension and expansion of its existing operating and term loan facilities.
The transaction is expected to close in the first quarter of 2019.
Print this page
