Canada-headed forest products major Resolute Forest Products Inc (Resolute) has announced that it has completed the previously announced acquisition of compatriot Conifex Timber Inc.'s (Conifex) three sawmills in the southern United States (US). The purchase price was US$163 million, plus working capital, which is estimated at US$13 million, for a total consideration of US$176 million.
Announced in December 2019, an affiliate of Resolute completed the acquisition on February 1, 2020, of Conifex Timber Inc.’s three sawmills in the US South
The three sawmills, with a combined production capacity of 550 million board feet (≈ 1.29 million m3) sawn wood, are located in Cross City, Florida (FL), and Glenwood and El Dorado, Arkansas (AR). The facilities produce construction-grade dimensional lumber and decking products from locally-sourced southern yellow pine (SYP) for distribution within the United States.
This transaction diversifies the company’s lumber production: when operating to capacity, almost 25 percent of Resolute’s lumber production will be in the US South.
We are pleased to welcome the new employees to Resolute. The acquisition of the U.S. sawmills is the right move, at the right time, for Resolute; it will give us immediate scale in an attractive region, with quality assets in a rich fiber basket, close to growing end-markets, said Yves Laflamme, President, and CEO of Resolute Forest Products.
For Conifex, its lumber segment credit facility was repaid in full on closing. The balance of the proceeds from the sale are planned to be used for working capital and general corporate purposes.