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Interfor Corporation announced on Thursday, May 27, 2021, that it has reached an agreement with Georgia-Pacific Wood Products LLC and GP Wood Products LLC to acquire four of its sawmill operations located in Bay Springs, Mississippi, Fayette Alabama, DeQuincy, Louisiana and Philomath, Oregon.

The total purchase price of US $375 million, which includes working capital, will be funded entirely from cash on hand.

The sawmill operations are highly complementary to Interfor’s existing platforms in the US South and the US Northwest, and the acquisition will support accelerated growth and enhance the company’s position to benefit from robust market conditions. The acquisition will be immediately accretive to Interfor’s earnings and is expected to provide attractive returns in both the near-term and over the long-term.

In a statement Ian Fillinger, Interfor Corporation’s President and Chief Executive Officer said, “This acquisition enhances Interfor’s growth-focused strategy as a pure-play lumber producer and provides significant economies of scale given the complementary geographic fit with our existing US operations. We’re excited to acquire these high-quality assets as part of our balanced approach to capital allocation to drive shareholder value.”

The sawmill operations have a combined annual lumber production capacity of 720 million board feet. The Bay Springs, Fayette and Philomath sawmills are currently operating on a full-shifting basis. The DeQuincy sawmill, which was idled in May 2020 during the COVID-19 pandemic, has an annual capacity of 200 million board feet. Interfor is currently evaluating its strategy and options for the site, including re-start plans. On a pro-forma basis, Interfor’s total annual lumber production capacity will increase to 3.9 billion board feet, of which 3.0 billion board feet or 77% will be US-based and not subject to softwood lumber duties.

Interfor’s US South production capacity will grow by 500 million board feet, or 29%, to 2.2 billion, while production capacity in the US Northwest will grow by 220 million, or 40%, to 770 million board feet. Following the transaction, 57% of Interfor’s production capacity will be in the US South, 20% will be in the US Northwest and the remaining 23% will be in British Columbia.

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