Canfor to Acquire PinkWood I-Joist Business

On Tuesday, Canfor Corporation announced that it has entered into an agreement with PinkWood Ltd. to acquire its I-joist business for CA$68.0 million (US$48.8 million), including working capital.

Founded in 2009, PinkWood is Western Canada’s largest I-joist manufacturer, producing engineered wood joists for residential, multifamily, and commercial construction. The Calgary, Alberta-based company employs 120 people and has annual production capacity of 46 million linear feet.

Canfor said the purchase price represents a five-times EBITDA multiple based on current production levels and earnings, including identified synergies. Following recent capital investments, the company sees opportunities for production growth and EBITDA expansion. Of the total consideration, $55.0 million will be paid at closing, with the remaining $13.0 million payable over five years.

PinkWood will retain its name and operate as a wholly owned subsidiary of Canfor. Canfor expects to finance the acquisition through cash on hand and available liquidity. The transaction is expected to close in Q3, subject to customary closing conditions.

Commenting on the transaction, Canfor President and CEO Susan Yurkovich said:

“PinkWood is a leading manufacturer of high-quality I-joists with a strong management team and stable returns. Canfor’s acquisition of PinkWood complements our operations in Western Canada by enhancing product diversification and supporting the continued expansion of our value-added manufacturing capabilities. We are pleased to welcome the PinkWood team and believe this acquisition will strengthen our existing asset base and create opportunities for growth and value creation.”