Canada-headed forest industry major Canfor Corporation (Canfor) has announced that it has entered into an agreement to acquire US-based Elliott Sawmilling Co., Inc. (Elliott) for a purchase price of US$110 million, which includes normalised working capital.
Located in Estill, South Carolina (SC), Elliott Sawmilling is a 100 percent Southern Yellow Pine (SYP) lumber sawmill and woodchips producer. The privately held company has an annual production capacity in excess of 210 million board feet (≈ 496 000 m3) and the sawmill consists of both large and small log lines.
We are thrilled to welcome the employees of Elliott to the Canfor team. Elliott has an excellent management team and produces high quality products that will align well with Canfor’s high-value product mix. Nash Elliott will continue as the General Manager after the transaction is completed. The purchase of Elliott will further expand our production capacity to meet the growing demand of our customers, said Don Kayne, President and Chief Executive Officer of Canfor.
The purchase price represents a 4.3 times EBITDA multiple based on Elliott’s twelve months trailing EBITDA. The transaction will be completed in two phases with 49 percent being acquired on closing and 51 percent being acquired one year later.
The transaction is expected to close in the first half of 2019 and is subject to confirmatory due diligence, completion of certain transaction documents and other customary closing conditions.