VANCOUVER, B.C. – Mercer International Inc., a global producer of market pulp and solid wood products with mills and facilities in the U.S., Canada, Germany, and Australia has agreed to acquire all of the outstanding shares of the parent company of HIT for consideration of €270 million (approx. $275.4 million), inclusive of forecasted net working capital of approximately €43 million ($43.9 million).
HIT owns 100% of a timber processing and value-add pallet production facility in Torgau, Germany, and a wood processing facility in Dahlen, Germany, that produces garden products.
The deal is expected to close in the third or early fourth quarter of 2022.
Juan Carlos Bueno, Mercer CEO, said, “This acquisition significantly increases our solid wood operations in Germany. It will allow us to capitalize on synergies with our German operations, including complementing our Friesau sawmill. Additionally, the acquisition will allow us to diversify our product mix with the introduction of pallets and biofuels.”
Calling it a highly strategic transaction, Bueno said that the transaction creates a platform for immediate cash flow generation and earnings accretion. It is an important step in our long-term value-add strategy of growth in timber processing.
“The HIT Facility has solid operating platforms in place, which can be further enhanced through improved efficiencies and capital improvements,” Bueno said. “We are delighted to welcome the employees of HIT to the Mercer team and, consistent with all our operations, we look forward to integrating the HIT operations within our core values of health and safety, sustainability, integrity, innovation, performance excellence as well as diversity, equity, and inclusion.”
The HIT facility in Torgau is a fully integrated wood processing facility and its production capabilities include wood pallets, lumber, biofuels (briquettes and pellets), garden products, and bio-electricity. It is the world’s largest producer of EPAL pallets and Europe’s largest single-site pallet producer with an annual capacity of up to 17 million pallets, and it can process up to 410 MMfbm of lumber, with investment opportunities to expand capacity.
In May, the company announced the expansion of some of its North American operations. Mercer Mass Timber LLC., a subsidiary of Mercer International plans to invest $50 million over the next two years in capital projects at its Spokane Valley mass timber manufacturing facility.
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