Canfor's Swedish subsidiary, Vida Group, has entered an agreement to purchase three sawmills in the Scandanavian country for $43 million plus working capital, the company said Wednesday.
Owned by Bergs Timber, they are located in Vimmerby, Mrlunda and Orrefors, Sweden, and will add about 215 million board feet to Vida's annual capacity.
With additional investment, Vida anticipates the production capacity of the mills can be increased to 300 million board feet, Canfor said in a statement.
"We are excited that Vida's strong performance and balance sheet has enabled them to grow their operating footprint in Sweden," Canfor CEO said Don Kayne said.
After taking into account this additional production capacity, Canfor said Sweden represents 22 per cent of the company's production capacity, plus 43 per cent in British Columbia, 31 per cent in the southern United States and four per cent in Alberta.
The transaction is expected to close in the third quarter of 2020 and is subject to due diligence, completion of certain transaction documents and other customary closing conditions, including any required regulatory approvals.
Following downtime related to the impacts of the COVID-19 pandemic, Vida is operating at full capacity and Canfor continues to employ variable operating schedules in North America with sawmills in the United States operating at almost full capacity and Canadian sawmills operating at about 90 per cent effective June 18, the compnay said.
