Interfor agrees to acquire Pope & Talbot sawmills
November 20, 2007 By Pulp & Paper Canada
Vancouver, BC — International Forest Products Limited has announced that it has reached agreement to acquire the C…
Vancouver, BC — International Forest Products Limited has announced that it has reached agreement to acquire the Castlegar and Grand Forks, BC, and the Spearfish, SD, sawmill assets and related timber tenures of Pope & Talbot and certain affiliates. The Castlegar and Grand Forks mills are large producers of specialty and commodity grade lumber products serving markets principally in the United States and Canada. The Spearfish mill is a small but profitable operation serving specialty markets in the United States. The purchase price is US$69 million for the fixed assets, less adjustments for specific liabilities assumed. Interfor will also purchase certain current assets which could total up to US$20 million, assuming P&T meets specified target inventory requirements.
The acquisition of the three sawmills, if completed, will increase Interfor’s total lumber capacity by approximately 580 million board feet per year to approximately 1.9 billion board feet. The acquisition also includes timber tenures representing annual harvesting rights of approximately 1 million cubic metres in the southern interior of British Columbia.
“We view the acquisition of these mills as an attractive opportunity to add critical mass in one of our core operating regions and to expand our presence in the U.S.,” said Duncan Davies, Interfor’s president and CEO. “The transaction will also broaden our product lines in both specialty and commodity grades.”
The transaction is subject to approvals by the U.S. Bankruptcy Court and a Canadian court and will be effected under procedures that provide for the possibility of competing bids. In the event a superior offer is submitted after bidding procedures orders are granted by the Courts, and a transaction completed with another party, Interfor will receive a break-up fee of US$3.2 million and expense reimbursement of up to US$700,000, subject to court approval. The transaction is also subject to customary regulatory approvals in Canada and the United States, and is expected to close in the first quarter of 2008.
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