News, Supplier News

Georgia-Pacific Sells Four Lumber Mills to Interfor

(Photo courtesy of Georgia-Pacific)

Georgia-Pacific reports that it has completed the sale of four lumber mills to Interfor Corp., a forest products company based in British Columbia. 

Interfor completed purchase July 9 of sawmill operations located in Bay Springs, Mississippi; Fayette, Alabama; DeQuincy, Louisiana; and Philomath, Oregon. The total purchase price of $375 million (US), which includes working capital, was funded entirely from cash on hand.

“This acquisition enhances Interfor’s growth-focused strategy as a pure-play lumber producer and provides significant economies of scale given the complementary geographic fit with our existing U.S. operations,” says Ian Fillinger, president and CEO.

“We’re excited to acquire these high-quality assets as part of our balanced approach to capital allocation to drive shareholder value.

The sawmill operations have a combined annual lumber production capacity of 720 million board feet. The Bay Springs, Fayette, and Philomath sawmills are currently operating on a full-shifting basis. 

The DeQuincy sawmill, which was idled in May 2020 during the COVID-19 pandemic, has an annual capacity of 200 million board feet. Interfor is currently evaluating its strategy and options for the site, including re-start plans.

On a pro forma basis, Interfor’s total annual lumber production capacity will increase to 3.9 billion board feet, of which 3.0 billion board feet or 77 percent will be U.S.-based and not subject to softwood lumber duties. 

Interfor’s U.S. South production capacity will grow by 500 million board feet, or 29 percent, to 2.2 billion, while production capacity in the U.S. Northwest will grow by 220 million, or 40 percent, to 770 million board feet. 

Following the transaction, 57 percent of Interfor’s production capacity is in the U.S. South, 20 percent in the U.S. Northwest, and the remaining 23 percent is in British Columbia. 

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