Vancouver-based Canfor Corporation (TSX: CFP) is expanding into Central Sweden through a new acquisition by its subsidiary.
Vida AB, a Swedish wood products company that is 77 per cent owned by Canfor, announced Tuesday it has entered into an agreement to purchase AB Karl Hedin Sågverk, a sawmill and wood products firm in Central Sweden, for $164 million.
AB Karl Hedin Sågverk operates three sawmills in the region and is expected to add around 230 million board feet to Vida’s annual production capacity, according to Canfor.
“This strategic acquisition will enhance Vida's strong operating platform and provide further diversification into Central Sweden,” said Susan Yurkovich, president and CEO of Canfor, in a Tuesday statement.
“These operations have access to exceptionally high-quality timber and are well positioned to complement Vida's high-value product offering.”
Following the acquisition, Canfor said Vida will have a total annual production capacity of about 2.1 billion board feet.
The company expects to save $15 million over the next three years mainly through the alignment of marketing programs, log procurement and operational practices.
Vida AB is acquiring the firm from Mattsbo Såg AB and certain minority shareholders.
The transaction is expected to close in the coming months, subject to customary closing conditions including regulatory approvals, according to Canfor.
