Interfor Buying 4 Simpson Mills
(Dec. 23, 2014) Simpson Lumber Co. has agreed to sell its sawmill operations in Commencement Bay (Port of Tacoma) and Longview, Wa.; Meldrim, Ga.; and Georgetown, S.C., to Interfor Corp., Vancouver, B.C.
Simpson will retain its sawmills in and around Shelton, Wa.
The mills have a combined annual lumber capacity of 750 million bd. ft. and produced 555 million bd. ft. in 2014. The additions will increase Interfor’s total capacity by 30% to 3.1 billion bd. ft..
Interfor said the mills complement its existing facilities in the Pacific Northwest and Southeast.
“This transaction is another important milestone for Interfor,” said Duncan Davies, Interfor’s President and CEO. “The Simpson operations are a great strategic fit with our platforms in the U.S. Southeast and Pacific Northwest, with significant operational and financial upside. Equally important is the deal structure that has two distinct components: (1) the acquisition of three profitable sawmills at values that will create immediate accretion; and (2) the acquisition of a fourth sawmill using a contingent payment structure that ties the ultimate purchase price of that sawmill to its future results.”
Interfor will pay $94.7 million plus a series of contingent future payments totalling at least $10 million tied to the financial performance of the Commencement Bay sawmill, which is currently undergoing a $5-million modernization.
The deal is expected to close in the first quarter.
