Vida AB Expands into Central Sweden

Canfor Corporation announced that its 77%-owned subsidiary, Vida AB, has entered into an agreement to purchase AB Karl Hedin Sågverk from Mattsbo Såg AB and certain minority shareholders for a purchase price of $164 million (1.15 billion Swedish Krona), including working capital of approximately $39 million.

AB Karl Hedin Sågverk operates three sawmills located in Central Sweden and will add approximately 230 million board feet to Vida’s annual production capacity. Following completion of this acquisition, Vida will have annual production capacity of approximately 2.1 billion board feet. Annual synergies of approximately $15 million are expected to be achieved within three years as a result of this transaction principally related to alignment of marketing programs as well as log procurement and operational practices.

“This strategic acquisition will enhance Vida’s strong operating platform and provide further diversification into Central Sweden. These operations have access to exceptionally high-quality timber and are well positioned to complement Vida’s high-value product offering,” said Susan Yurkovich, President and Chief Executive Officer of Canfor.

Canfor anticipates financing this transaction largely with cash on hand and new equity from minority Vida AB shareholders. The transaction is expected to close over the next several months and is subject to customary closing conditions, including regulatory approvals.

About Vida

Vida is a global supplier of refined products from sustainable Swedish forests. The group has approximately 1,600 employees at 24 production facilities, of which 12 are sawmills. The industries are strategically located near the forest owners in Småland, Skåne and Västra Götaland. Production is mainly focused on structural timber for a number of different markets. 88 percent of Vida’s sawn wood products are exported to Europe, the USA, Australia, Africa and Asia. The business also includes packaging manufacturing, bedding and pellet manufacturing, biofuel trading and house manufacturing.

About Canfor Corporation

Canfor is a global leader in the manufacturing of high-value low-carbon forest products including dimension and specialty lumber, engineered wood products, pulp and paper, wood pellets and renewable energy. Proudly headquartered in Vancouver, British Columbia, Canfor produces renewable products from sustainably managed forests, at more than 50 facilities across its diversified operating platform in Canada, the United States and Europe. The Company has a 77% stake in Vida AB, Sweden’s largest privately owned sawmill company and also owns a 54.8% interest in Canfor Pulp Products Inc. Canfor shares are traded on The Toronto Stock Exchange under the symbol CFP. For more information visit canfor.com.

Contact:

Mina Laudan – VP, Corporate Affairs – (604) 661-5225 – media@canfor.com

Source: Canfor Corporation