Interfor to Buy Georgia Lumber Mills for $180 Million From Ilim

Monday, Feb 10, 2014
International Forest Products Ltd. (IFP/A) agreed to purchase operations including two Georgia sawmills for $180 million from Ilim Timber Continental SA to expand in the U.S. Southeast.

International Forecast Products, the Vancouver-based company known as Interfor, said its annual capacity to produce lumber will increase by about 20 percent with the purchase of Tolleson Ilim Lumber Co. Interfor said today in a Marketwired statement that it will pay $129.9 million in cash and retained liabilities, plus 3.68 million shares for the Perry, Georgia-based business.

Interfor said that yearly capacity of 2.6 billion board feet will make it among the five-biggest North American lumber companies and the deal would increase earnings immediately, without elaborating. The company plans to evaluate international marketing initiatives with Ilim Lumber, including serving as a sales agent in North America and cooperation in China, Japan and the Middle East.

“The Tolleson mills are a great fit with our operations in the U.S. Southeast and provide a larger footprint on which to build our presence in the region,” Interfor Chief Executive Officer Duncan Davies said in the statement.

As part of the transaction, closely held Ilim Timber will nominate Paul Herbert to Interfor’s board. He recently retired as CEO of Ilim Group, Russia’s largest forestry, pulp and paper company, a venture among International Paper Co., Ilim Timber’s principals and other investors, Interfor said.

After the deal, Ilim Timber will hold 5.5 percent of Interfor’s shares outstanding, according to the statement.

The deal was projected to close this quarter.