VANCOUVER, November 15, 2018 /PRNewswire/ --
Canfor Corporation (TSX:CFP) announces that it has entered into
an agreement to purchase 70% of the VIDA Group ("VIDA") of
Sweden for a purchase price of
3,990 million Swedish Krona (approximately CAD$580 million) on a cash and debt free basis,
which includes CAD$125 million (70%)
of normalized working capital. The current owners of VIDA will
retain a 30% interest and continue to manage the day-to-day
business.
"With the acquisition of VIDA, we are excited to become a truly
international manufacturer and provider of wood product solutions
for our global customers," said Don
Kayne, President and Chief Executive Officer of Canfor.
"This transformational growth will allow Canfor to further
diversify and secure a worldwide fibre supply to meet the growing
demand of our customers for high quality wood products."
VIDA is Sweden's largest
privately owned sawmill company, operating nine sawmills in
southern Sweden with an annual
production capacity of 1.1 billion board feet. All of the sawmills
produce spruce and pine products, and are strategically located in
high quality and sustainable fibre regions of Sweden. In addition, VIDA has nine value-added
facilities that include premium packaging, modular housing,
industrial products and energy.
"VIDA, a well known brand in its current markets, is aligned
with our corporate strategy of producing high-value products,
providing an exceptional customer service experience and
maintaining a low cost structure," added Kayne. "We are
excited that Santhe Dahl, Group CEO
and Måns Johansson, Deputy CEO, of VIDA will continue to lead the
company operations in Sweden. We
welcome VIDA's skilled management team, talented employees and
modern operations to our Company."
"We have known Canfor for a long time as a high-quality
manufacturer and provider of wood product solutions. We are proud
to announce that we are now becoming part of a global operation
together with Canfor. This will allow us to continue to strengthen
and develop the VIDA brand on a global scale," said Santhe Dahl, Chief Executive Officer,
VIDA Group.
In conjunction with the Elliott Sawmilling Company Inc.
acquisition announced last week, this acquisition is a positive
step forward in our diversification strategy for our
operations, products and customers. After taking into account
the full impact of VIDA and Elliott, Canfor's annual
production capacity will be approximately 7.2 billion board feet,
with a highly diversified operating base in western Canada, the U.S. and Europe.
The purchase price represents a 5.7 times EBITDA multiple based
on VIDA's 2018 projected EBITDA of approximately CAD$145 million, before taking account of
estimated annual synergies of CAD$20
million, projected to be achieved through marketing
opportunities arising from the increased global scale of our
business.
The Company anticipates being able to finance this transaction
with cash and liquidity on hand but will complete an extension and
expansion of its existing operating and term loan facilities.
The transaction is expected to close in the first quarter of
2019 and is subject to due diligence, completion of certain
transaction documents and other customary closing conditions,
including any required regulatory approvals.
Backgrounders
Backgrounders on both Canfor Corporation and the VIDA Group have
been posted on canfor.com in the News & Press Releases
section.
Analyst Conference Calls
An analyst conference call to discuss this acquisition will be held
on Thursday, November 15, 2018 at
10:00 AM Pacific Time. A
deck titled "Acquisition Updates" has been posted on canfor.com in
the Investors section under Presentations.
To participate in the call, please dial one of the following
numbers:
North America Toll-Free Access: 1-888-390-0546
North America Access: 1-416-764-8688
ITF - Sweden: 0200899189
ITF - Sweden (mobile):
0200899189
Let the operator know you wish to participate in the Canfor
conference call.
Following management's discussion, the analyst and investment
community will be invited to ask questions.
For Instant Replay Access please dial one of the following
numbers and enter
North America Toll-Free Access: 1-888-390-0541
North American Access: 1-416-764-8677
Participant Pass Code: 336261#
Recording available until: November 29,
2018
The conference call will be available live at
http://www.canfor.com.
Media Conference Call
A media conference call with Don
Kayne will be held on Thursday,
November 15, 2018 at 11:30 AM Pacific
Time. To participate in the call, please dial one of the
following numbers:
North America Toll-Free Access: 1-888-390-0546
North America Access: 1-416-764-8688
ITF - Sweden: 0200899189
ITF - Sweden (mobile):
0200899189
Let the operator know you wish to participate in the Canfor
conference call.
Following management's discussion, the media will be invited to
ask questions.
For Instant Replay Access please dial one of the following
numbers and enter
North America Toll-Free Access: 1-888-390-0541
North American Access: 1-416-764-8677
Participant Pass Code: 578527#
Recording available until: November 29,
2018
The conference call will be available live at
http://www.canfor.com.
Forward Looking Statements
Certain statements in this press release constitute
"forward-looking statements" which involve known and unknown risks,
uncertainties and other factors that may cause actual results to be
materially different from any future results, performance or
achievements expressed or implied by such statements. Words such as
"expects", "anticipates", "projects", "intends", "plans", "will",
"believes", "seeks", "estimates", "should", "may", "could", and
variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are
based on management's current expectations and beliefs and actual
events or results may differ materially. There are many factors
that could cause such actual events or results expressed or implied
by such forward-looking statements to differ materially from any
future results expressed or implied by such statements. In
addition, assumptions on which such forward-looking statements are
based include the timely receipt of regulatory approvals and no
adverse regulatory decisions, the timely and successful integration
of the Company and VIDA AB and the accuracy and completeness of the
information provided to the Company in respect of VIDA AB. There
can be no assurance that the proposed transaction will occur or
that the anticipated strategic benefits and synergies will be
realized in their entirety, in part or at all. Forward-looking
statements are based on current expectations and Canfor assumes no
obligation to update such information to reflect later events or
developments, except as required by law.
Canfor is a leading integrated forest products company based
in Vancouver, British Columbia
("BC") with interests in BC, Alberta, North and South Carolina, Alabama, Georgia, Mississippi and Arkansas. Canfor produces
primarily softwood lumber and also owns a 54.8% interest in Canfor
Pulp Products Inc., which is one of the largest producers of market
northern bleached softwood kraft pulp and a leading producer of
high performance kraft paper. Canfor shares are traded
on the Toronto Stock Exchange under the symbol CFP.
Media Contact: Michelle Ward,
Director, Corporate Communications, 1 (604) 661-5225,
communications@canfor.com; Investor Contact: Pat Elliott, Vice President, Corporate Finance
and Strategy, 1 (604) 661-5441, Patrick.Elliott@canfor.com