Canfor Subsidiary to Buy Bergs Timber Sawmills in Sweden

SEATTLE (Scrap Monster): Canfor Corporation announced that its 70%-owned subsidiary, Vida Group, has signed an agreement to purchase three Swedish sawmills from Bergs Timber. The transaction covers the saw mills in Orrefors, Vimmerby and Morlunda and is expected to be completed in September this year, subject to customary closing conditions, including necessary regulatory approvals.

The purchase price is fixed at CAD$43 million plus working capital, out of which $32.6 million pertains to fixed assets. The transaction is expected to free up additional $16.1 million in working capital. Further to the deal, Bergs will recognize a capital gain before tax of approximately $10.7 million. As per sources, Vida will also acquire the assets of discontinued operations in Gransjo.

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The acquisition will add nearly 215 million board feet to Vida’s annual processing capacity. The company plans to make additional investment at the mills so as to increase their combined production capacity to 300 million board feet.

Don Kayne, President and Chief Executive Officer, Canfor noted that Vida’s strong performance and balance sheet has enabled them to expand their operating footprint in Sweden.

Bergs Timber had reported year-on-year surge in net profit during Q1 this year, despite 3% decline in net sales.