International Forest Products Ltd. (TSX: IFP-A.TO) plans to acquire three sawmills and other timber assets from troubled Portland-based Pope & Talbot Inc. for $69 million.
Included in the deal with Pope and Talbot, which in October filed for creditor protection in Canada, are the B.C.-based Castlegar and Grand Forks mills and the Spearfish mill located in South Dakota.
The three mills will increase Interfor's total lumber capacity by 31% to approximately 1.9 billion board feet per year.
The acquisition also includes timber assets representing annual harvesting rights of roughly one million cubic metres in B.C.'s southern Interior.
Between 2002 and 2006, the three mills generated average annual EBITDA (before softwood lumber duty refunds) of approximately US$16 million. They generated peak EBITDA of approximately US$36 million in 2004.
A break-up fee of US$3.2 million and expense reimbursement of up to US$700,000 is included in the deal.
Interfor's share price range during the past week: between $5.15 and $5.21; 52-week high: $ 9.84; 52-week low: $5.02.