Ainsworth Lumber Co. Ltd. (TSX:ANS) wants total control of its Footner mill in High Level, Alberta.
On Monday, the Vancouver-based oriented strand board (OSB) producer announced plans to buy the remaining 50% interest in Footner from Grant Forest Products Inc.
The deal is valued at $20 million and would give Ainsworth full ownership of the mill.
Although production at Footner remains curtailed, the company has expressed interest in taking control of Footner for some time.
In July, Ainsworth president and CEO Rick Huff told Business in Vancouver he thinks one company is better positioned to run the mill than two. (See “Board work” – issue 1085; August 10-16.)
Huff, who was once general manager at Footner and helped launch what remains the world largest single-line continuous press, revealed the relationship between Ainsworth and Grant has at times been “dysfunctional.”
These days, Grant is mired in bankruptcy protection, but despite tough times in the forestry sector, Ainsworth has posted positive results.
In the third quarter of 2010, the company recorded an adjusted EBITDA of $8.8 million compared with $2.6 million for the same period in 2009.
The company also operates OSB mills in 100 Mile House, Grand Prairie and Barwick, Ontario.
Should Ainsworth close the deal to acquire the remaining 50% of Footner, the asset would have the largest production capacity among its fleet mills with the ability to produce 860 million square feet of OSB annually.
At press time, the company’s shares remained unchanged at $2.65.