Bergs Timber reveals intention to acquire Fågelfors Hyvleri
Sweden-headed solid wood processing major Bergs Timber AB has revealed that it has signed a Letter of Intenet (LoI) to acquire compatriot wood pellet and briquette producer Fågelfors Hyvleri AB. The transaction assumes that a Share Purchase Agreement (SPA) is entered into, a formal audit, and due diligence is carried out to Bergs Timber's satisfaction, financing and a final board decision to implement the transaction.
According to a statement, Bergs Timber will make an announcement once the Share Purchase Agreement (SPA) is signed and closing of the transaction is planned by June 30, 2019. The Letter of Intent (LoI) grants Bergs Timber exclusivity for the period.
The indicative purchase price for the shares in Fågelfors Hyvleri is SEK 48 million (≈ EUR 4.44 million) of which SEK 30 million (≈ EUR 2.78 million) is intended to be paid in cash and the balance in new class B shares in Bergs Timber AB (corresponding to approx. 5.14 million new shares, or approx. 1.49% of the total number of shares post share issue, if the Bergs Timber share price would be SEK 3.50 at the time of the new share issue).
Subject to the SPA, the board of Bergs Timber intends to issue the new class B shares by virtue of the authorization to issue new shares proposed which was decided by Bergs Timber shareholders at the Annual General Meeting (AGM) held on May 8, 2019.
Significant pellets producer
Founded in 1919, Bergs Timber Group currently consists of six subsidiaries in Estonia, Latvia, Sweden, and the UK. With an annual sawn wood production capacity of around 1 million m3, Bergs Timber Group operates 11 production facilities including sawmills, planer mills, wood treatment, joineries, and wood pellet production along with forest harvesting operations. The Group also operate the Port of Creeksea, on the River Crouch in the UK.
Fågelfors Hyvleri is a wood pellet producer with an annual capacity of approximately 90 000 tonnes of pellets and approximately 20 000 tonnes of briquettes. In addition, Fågelfors Hyvleri operates a planer mill with an annual capacity of approximately 30 000 m3. The planned acquisition would make Bergs Timber a larger pellet producer by Swedish standards with a total annual capacity of almost 128 000 tonnes in Sweden and Latvia.
Fågelfors Hyvleri suits very well in our strategy to increase further processing. It is also well located in the area around our Swedish sawmills, said Peter Nilsson, CEO of Bergs Timber.