Interfor Corporation announced on Tuesday, November 23, 2021 that it has reached an agreement with an affiliate of Kelso & Company to acquire 100% of the equity and interests of EACOM Timber Corporation. The purchase price is C$490 million on a cash and debt-free basis, which includes C$120 million of net working capital.
In addition, Interfor will assume EACOM’s countervailing (“CV”) and anti-dumping (“AD”) duty deposits at closing, for consideration equal to 55% of the total deposits on an after-tax basis. As of September 30, 2021, EACOM had paid cumulative CV and AD duties of US$150 million. EACOM is a leading lumber producer in eastern Canada, with operations across the provinces of Ontario and Quebec.
According to the announcement the transaction will include: seven sawmills with a combined annual spruce-pine-fir (“SPF”) lumber production capacity of 985 million board feet; an I-Joist plant with annual production capacity of 70 million linear feet; a value-added remanufacturing plant with annual production capacity of 60 million board feet; rights to access approximately 3.6 million cubic meters per year of responsibly managed and internationally certified fiber supply; and an office in Montreal.
Ian Fillinger, President & Chief Executive Officer of Interfor Corporation said, “This transaction makes Interfor a truly North American lumber producer, with operations in all the key fiber regions on the continent, further diversifying and de-risking our operating platform and enhancing our growth potential and opportunity set.”
The completion of the acquisition is subject to customary conditions and regulatory approvals for a transaction of this kind and is expected to close in the first half of 2022.
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Interfor to Acquire EACOM Timber Corporation, Adding One Billion Board Feet of Lumber Production and Expanding Regional and Product Diversity