Canfor to Acquire Majority Interest in VIDA Group of Sweden
Canfor Corporation (“Canfor”) 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.
Canfor Corporation is one of the world’s largest producers of sustainable lumber, pulp and paper, and a North American leader in green energy production. Headquartered in Vancouver, British Columbia (“BC”), the company has operations in BC, Alberta, North and South Carolina, Alabama, Georgia, Mississippi and Arkansas. Canfor 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 Corporation is listed on the Toronto Stock Exchange under the symbol CFP and Canfor Pulp Products Inc. is also listed on the Toronto Stock Exchange under the symbol CFX. Canfor owns 38 production facilities, 21 of which are in British Columbia, Canada, 2 in Alberta, Canada and 15 in the U.S. South (Alabama, Arkansas, Georgia, Mississippi, North Carolina, South Carolina). The majority of operations are lumber production facilities but the company also operates pulp mills, pellet plants, a seedling nursery and a green energy facility. In addition to producing dimension lumber, a significant and increasing proportion of Canfor’s lumber is made up of specialty and high-value products and is shipped globally.
About VIDA Group
The VIDA Group is Sweden’s largest privately owned sawmill company. Corporate entities in the Group include VIDA AB, VIDA Wood AB (sales), VIDA Skog AB (purchasing), VIDA Packaging AB, VIDA Energi AB, and VIDA Building AB. VIDA’s lumber production is primarily focused on structural timber, approximately 75% of which is exported to Europe, USA, Australia, Africa and Asia. Operations also include the manufacturing and sale of wood packaging, pellets and housing/building components. VIDA owns nine sawmills, which are located near forest owners in the Småland and Västra Götaland regions of Sweden. In addition, the Group has location-specific corporate entities: VIDA Alvesta AB, VIDA Vislanda AB, VIDA Borgstena AB, VIDA Hestra AB, VIDA Bruza AB, VIDA Urshult AB, Vida Hästveda AB, Vida Tranemo AB and VIDA Nössemark.
Michelle Ward – Director, Corporate Communications – email@example.com – (604) 661-5225
Pat Elliot – Vice President, Corporate Finance & Strategy – Patrick.Elliott@canfor.com – (604) 661-5441
Source: Canfor Corporation