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Canfor to acquire majority interest in VIDA Group of Sweden

Canada-headed for industry major Canfor Corporation (Canfor) has announced that it has entered into an agreement to purchase 70 percent of the VIDA Group (VIDA) of Sweden for a purchase price of SEK 3.99 billion (≈ CA$580 million) on a cash and debt free basis, which includes CA$125 million (70 percent) of normalized working capital. The current owners of VIDA will retain a 30 percent interest and continue to manage the day-to-day business.

With the acquisition of VIDA, we are excited to become a truly international manufacturer and provider of wood product solutions for our global customers. This transformational growth will allow Canfor to further diversify and secure a worldwide fibre supply to meet the growing demand of our customers for high-quality wood products, said Don Kayne, President and Chief Executive Officer of Canfor.

VIDA is Sweden’s largest privately owned sawmill company, operating nine sawmills in southern Sweden with an annual sawlog procesing capacity of 1.1 billion board feet (≈2.5 million m3). All of the sawmills produce spruce and pine products, and are strategically located in high quality and sustainable fibre regions of Sweden.

VIDA, a well-known brand in its current markets, is aligned with our corporate strategy of producing high-value products, providing an exceptional customer service experience and maintaining a low cost structure. We are excited that Santhe Dahl, Group CEO and Måns Johansson, Deputy CEO, of VIDA will continue to lead the company operations in Sweden. We welcome VIDA’s skilled management team, talented employees and modern operations to our company, added Kayne.

Canfor has announced that it has entered into an agreement to purchase 70 percent of the VIDA Group (VIDA), Sweden’s largest privately held sawmill and wood products group (photo courtesy VIDA).

In addition, VIDA has nine value-added facilities that include premium packaging, modular housing, industrial products and biomass energy, including a 60 000 per-annum wood pellet and animal bedding plant.

We have known Canfor for a long time as a high-quality manufacturer and provider of wood product solutions. We are proud to announce that we are now becoming part of a global operation together with Canfor. This will allow us to continue to strengthen and develop the VIDA brand on a global scale, said Santhe Dahl, Chief Executive Officer, VIDA Group.

In conjunction with the recently announced Elliott Sawmilling Company Inc. acquisition in the United States (US), the deal is described as a “positive step forward in our diversification strategy for our operations, products and customers.”

After taking into account the full impact of VIDA and Elliott, Canfor’s annual production capacity will be approximately 7.2 billion board feet (≈16.9 million m3), with a highly diversified operating base in western Canada, the US and Europe.

The purchase price represents a 5.7 times EBITDA multiple based on VIDA’s 2018 projected EBITDA of approximately CA$145 million, before taking account of estimated annual synergies of CA$20 million, projected to be achieved through marketing opportunities arising from the increased global scale of our business.

Canfor anticipates being able to finance this transaction with cash and liquidity on hand but will complete an extension and expansion of its existing operating and term loan facilities. The transaction is expected to close in the first quarter of 2019 and is subject to due diligence, completion of certain transaction documents and other customary closing conditions, including any required regulatory approvals.

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