December 24, 2019
Resolute Forest Products Inc. has entered into an agreement to acquire Conifex Timber Inc.’s three sawmills in the U.S. South for $163 million plus working capital delivered at closing, which is currently estimated at $7 million. The three sawmills, with combined production capacity of 550 million board feet, are located in Cross City (Florida), and Glenwood and El Dorado (Arkansas).
The sawmills produce construction-grade dimensional lumber and decking products from locally-sourced southern yellow pine for distribution within the U.S. Production capacity for Cross City is 185 million board feet and it is currently operating on a two-shift basis. Glenwood’s capacity is also 185 million board feet and it is operating on a 1.5 shift basis. The El Dorado mill, with capacity of 180 million board feet, was recently idled.
Resolute intends to build on Conifex’s significant capital investments in recent years, including $55 million previously invested in El Dorado, $23 million in Glenwood and $12 million in Cross City.
Resolute intends to finance the acquisition with its existing credit facilities. The transaction, which is subject to regulatory approvals and customary conditions, is expected to close in the 1Q 2020. The transaction is subject to termination if closing conditions are not met or waived by May 29, 2020.
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers.