Conifex Timber to Sell Three U.S. South Sawmills to Resolute Forest Products

SEATTLE (Scrap Monster): A share purchase agreement was reached between an affiliate of Resolute Forest Products Inc. and Conifex Timber Inc. The agreement pertains to purchase of Conifex’s three U.S. South sawmills by Resolute.

The transaction is expected to close by Q1 next year, subject to customary closing conditions. Also, it is subject to termination if closing conditions are not met or waived by 29^th May, 2020.

The transaction covers sale of Conifex’s assets comprising of its El Dorado (Arkansas), Cross City (Florida) and Glenwood (Arkansas) sawmills and related operations. As per the deal, Resolute will pay $163 million in cash plus net working capital at closing, which is estimated at around $7 million.

The three mills have a combined production capacity of approximately 550 million board feet of construction-grade dimensional lumber and decking products. The Cross City and Glenwood sawmills have a capacity of 185 million board feet each, whereas the recently idled El Dorado mill has a capacity of 180 million board feet.

Ken Shields, Conifex's President and CEO noted that the net proceeds from the sale will be used towards full payment of its outstanding lumber segment credit facility, for working capital and for general corporate purposes. The transaction will deliver financial stability, which in turn will help the company to enhance the performance of its lumber manufacturing and power generation business in Mackenzie, B.C, he added.

Resolute plans to finance the acquisition with existing credit facilities.