VANCOUVER — Lumber producer Interfor Corp. is buying a sawmill in South Carolina from WestRock Co. for US$59 million in cash.
The news comes as North American lumber prices set new record highs, less than a week after Interfor CEO Ian Fillinger signalled on an earnings call that the cash-rich company is on the hunt for lumber mill acquisitions.
Interfor says the mill it's buying produced about 125 million board feet of lumber in 2020 but has a permit to expand to about 200 million board feet per year.
The purchase is expected to boost company capacity to 3.2 billion board feet per year, with 55 per cent in the Southern U.S.
In a report quoting lumber market watcher Random Lengths, CIBC analyst Hamir Patel said western spruce, pine and fir lumber hit a new record high of US$963 per thousand board feet on Tuesday and the lumber composite price is less than one per cent away from its all-time high set in mid-September.
Interfor says it has identified ways to optimize and increase production at the WestRock mill, noting it is less than 200 kilometres away from two of its existing mills.
"This transaction is a logical tuck-in with our existing U.S. South platform and reiterates Interfor’s commitment to disciplined growth and investment in the US South," Fillinger said in a news release.
This report by The Canadian Press was first published Feb. 10, 2021.
Companies in this story: (TSX:IFP)
The Canadian Press