Interfor to Exit Its Québec Operations

On Wednesday, Interfor announced that it plans to exit its operations in Québec, Canada, including the sale of its three manufacturing facilities and the closure of its Montréal corporate office. This strategic initiative will support a focus on the areas of highest future potential across the remainder of the company.

As part of the exit plan, Interfor announced that it has entered into a definitive agreement to sell its sawmills in Val-d’Or and Matagami as well as its Sullivan remanufacturing plant in Val-d’Or, along with all associated forestry and business operations, to Chantiers Chibougamau Ltée (CCL), a longstanding, privately held, Québec-based forestry company.

The purchase price is estimated to be approximately $30 million in cash, based on the value of specific working capital items on June 30, 2024, which will be subject to normal course adjustments at closing, plus the assumption of certain liabilities by CCL. Additionally, Interfor and CCL will enter into a multiyear contract for the supply of Machine Stress Rated (MSR) lumber to Interfor’s I-Joist engineered wood products (EWP) facility in Sault Ste. Marie, Ontario.

The sale does not include any countervailing (CV) or anti-dumping (AD) duty deposits related to the ongoing US–Canada softwood lumber trade dispute. All historical CV and AD deposits up to the date of closing will be retained by Interfor. Total CV and AD deposits related to the facilities up to June 30, 2024, totaled approximately US$56 million, excluding any interest.

As part of the exit plan, Interfor also announced that it intends to permanently close its corporate office in Montréal in the coming months, allowing for the full realization of synergies associated with the Company’s EACOM Timber Corporation acquisition announced in November 2021. Interfor will continue to own and operate its five sawmills and one I-Joist EWP facility in Ontario and its two sawmills and woodlands management business in New Brunswick.

The completion of the transaction is subject to customary conditions, including regulatory approvals, and is expected to close in 2024Q4.