Interfor to acquire forest products company

Chaleur Forest Products' sawmill.

BURNABY, B.C. – Interfor Corp. has reached an agreement with an affiliate of the Kilmer Group to acquire 100% of the equity interests in the entities comprising Chaleur Forest Products.

Chaleur owns “two modern and well-capitalized sawmill operations” located in Belledune and Bathurst, New Brunswick, with a combined annual lumber production capacity of 350 million board feet. 

Chaleur also operates a woodlands management division based out of Miramichi that manages approximately 30% of the total Crown forest in New Brunswick. This division provides a secure source of fiber supply for the sawmill operations as well as a stable, long-term stream of cash flow from third-party log sales, license management fees and silviculture activities.       

The purchase price is C$325 million ($239 million), on a cash and debt-free basis, which includes approximately C$31 million of net working capital. In addition, Interfor will assume Chaleur’s countervailing (“CV”) and anti-dumping (“AD”) duty deposits at closing, for consideration equal to 55% of the total deposits on an after-tax basis. As of Aug. 31, 2022, Chaleur had paid cumulative CV and AD duties of approximately $82 million.

“This acquisition is consistent with Interfor’s growth-focused strategy as a pure-play lumber producer and builds upon our recent expansion into Eastern Canada with further geographic diversity,” said Ian Fillinger, president & CEO. “New Brunswick has a secure, high quality and competitive log supply, a supportive investment environment and proximity to key eastern markets. These are well-managed and efficient mills with a desirable SPF product mix, which fit extraordinarily well within our existing portfolio. Chaleur’s strong management team further bolsters our core lumber strength and we look forward to welcoming the team into our company.”

On a proforma basis, Interfor’s total annual lumber production capacity will increase to 5.1 billion board feet, of which 44% will be in the US South, 19% in Eastern Canada, 15% in the US Northwest, 15% in British Columbia and 7% in Atlantic Canada.

The completion of the acquisition is subject to Canadian and U.S. regulatory reviews and customary conditions for a transaction of this kind and is expected to close in the fourth quarter of 2022.

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Larry Adams | Editor

Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).