Interfor Announced Acquisition of Chaleur Forest Products

SEATTLE (Scrap Monster): Interfor Corporation reached an agreement with an affiliate of the Kilmer Group to acquire 100% of equity interests in New Brunswick, Canada-based Chaleur Forest Products. The acquisition will be financed using a combination of cash on hand and its existing credit facilities. The transaction is expected to close in Q4 this year, subject to Canadian and U.S. regulatory reviews and customary conditions.

The purchase price of C$325 million includes approximately C$31 million of net working capital. Also, Interfor will assume Chaleur’s countervailing and anti-dumping duty deposits at closing, for consideration equal to 55% of the total deposits on an after-tax basis. It must be noted that Chaleur has paid cumulative countervailing and antidumping duties of around $82 million as of end-August this year.

Chaleur operates two modern sawmills in Belledune and Bathurst, New Brunswick, with a combined annual lumber production capacity of 350 million board feet. In addition, it also operates a woodlands management division based out of Miramichi.

Commenting on the acquisition, Ian Fillinger, President and Chief Executive Officer, Interfor noted that the acquisition is consistent with Interfor’s growth-focused strategy. Furthermore, it builds upon the company’s recent expansion into Eastern Canada with further geographic diversity, he added.

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