WFP closes Englewood deal
March 20, 2006 By Pulp & Paper Canada
For a total of $47.7 million, Western Forest Products wrapped up its purchase of Englewood’s Vancouver Island loggi…
For a total of $47.7 million, Western Forest Products wrapped up its purchase of Englewood’s Vancouver Island logging division, and struck a long-term deal to supply wood chips and logs to the former owners of the operation.
For its money, Western secured access to Tree Farm License 37, which included 6,800 hectares of private lands on Northern Vancouver Island, which are situated in close proximity to the company’s main logging operations.
Western also negotiated a 40-year agreement to supply wood chips and pulp logs to a partnership of Canfor Corp. and Oji Paper Canada.
“Synergies in excess of $6 million annually are expected to be realized within about 48 months,” said Reynold Hert, president and CEO of WFP.
Western confirmed it will secure a premium price for wood chips and logs delivered under the long-term fibre supply agreement. The company received a $35 million, non-refundable prepayment of the price premium, and the $45 million balance will help offset some other costs due in the Englewood deal.
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