Conifex Timber Signs Strategic Deal to Acquire Major U.S. Sawmills

SEATTLE (Scrap Monster): Conifex Timber Inc. has announced major U.S. expansion, by entering into key agreement to purchase two major sawmills in the U.S Southeast.

The agreement with the Blue Wolf (BW) is to acquire Suwannee Sawmill in Florida and Caddo River Sawmill in Arkansas. Through the agreement, Conifex will purchase all of the outstanding membership interests of Suwannee Lumber Holding Company, LLC, Suwannee Timber Management, LLC and Caddo River Forest Products, LLC. Both the facilities primarily produce Southern Yellow Pine (SYP) softwood lumber along with other specialty products. The estimated combined dimension lumber capacity of both the acquired mills is around 370 million board feet on a two-shift basis.

Post acquisition, Conifex expects its total lumber production capacity to increase significantly by almost 50% to 1.1 billion board feet per annum. Furthermore, its dimension lumber platform is likely to witness huge surge to nearly 550 million board feet per annum. In addition, the addition of premium priced SYP decking products will enhance the product mix offered by the company. The integration of the acquired mills with Conifex’s existing facilities is likely to generate over $5 million in synergies. It must be noted that both the mills had undergone considerable modernization and upgrades during recent past.

The transaction is subject to customary closing conditions, including necessary regulatory approvals. The company has already obtained commitment from bank for a five-year credit facility for an amount of $220 million, towards financing the transaction. The company is currently looking out for other supplementary funding options. According to Conifex, the transaction is expected to come to an end by second quarter this year.