VANCOUVER, BRITISH COLUMBIA - Building materials supplier CanWel announced that it will acquire Jemi Fibre making it one of Canada's only vertically-integrated building materials distribution firms.

Jemi Fibre,  a forest products company that operates primarily in British Columbia and Saskatchewan, owns approximately 136,000 acres of private timberlands, strategic crown licenses and tenures, log harvesting and trucking operations, several post and pole peeling facilities, two pressure-treated specialty wood production plants, and one specialty saw mill. This deal will make the company a wholly owned subsidiary of CanWel and will combine Jemi Fibre's operations with CanWel's Canadian platform.

"The transaction further solidifies our position in Canada as a leading manufacturer and distributor of building material and related products," said Amar Doman, Chairman and CEO of CanWel. "The acquisition of vast timberland holdings and experienced operators strengthens our supply chain, guaranteeing access to raw material supply for our company. We also forge stronger relationships with our existing suppliers, who are customers of Jemi Fibre. We are very pleased to deepen our presence in Western Canada, and look forward to welcoming our new colleagues to the CanWel family and accelerating our offerings, presence and overall growth together."

Key investment highlights include:

- Acquiring approximately 136,000 acres of private timberlands, harvesting operations, several post peeling facilities, two specialty wood treatment plants and one specialty saw mill

- Creates Canada's only vertically-integrated building materials distribution company

- Expected to be immediately accretive to CanWel's earnings and cash flow per share

- Unanimously approved by both Boards of Directors, with irrevocable support agreements signed by the holders of approximately 52% of Jemi Fibre's outstanding shares

- Partially funded via $20 million bought deal private placement of subscription receipts

The deal will require approval by 66-2/3 percent of the votes cast by the shareholders of Jemi Fibre present in person or represented by proxy at a special meeting of shareholders expected to take place in May 2016. But the deal does not require the approval of CanWel's shareholders.

Founded in 1989, CanWel is headquartered in Vancouver, British Columbia. It operates multiple treating plant and planing facilities in Canada and the United States, and operates distribution centres coast to coast in all major cities and strategic locations across Canada and near San Francisco and Los Angeles, California. CanWel distributes a wide range of building materials, lumber and renovation products.

 

Have something to say? Share your thoughts with us in the comments below.