Interfor Acquires Chaleur Forest Products in New Brunswick, Canada, The Canadian Business Journal

BURNABY, British Columbia, OCTOBER 3, 2022 (GLOBE NEWSWIRE) — Interfor Co., Ltd. (“Interfor” or the “Company”) (TSX: IFP) today agreed with an affiliate of the Kilmer Group (“Kilmer”) to acquire a 100% equity interest in the entities comprising Chaleur Forest Products announced that it did. (“Charul”).

Chaleur owns two modern, well-equipped sawmills in Belledune and Bathurst, New Brunswick, with a combined annual lumber capacity of 350 million board feet. Chaleur also operates a forest management unit based in Miramichi, which manages approximately 30% of all of New Brunswick’s Crown Forest. The division not only provides a secure source of fiber for sawmill operations, but also provides a steady, long-term cash flow stream from third-party log sales, license management fees, and forestation activities. .

The acquisition price is C$325 million on a cash and debt-free basis, including net working capital of approximately C$31 million. In addition, Interfor will undertake Chaleur’s offsetting (“CV”) and anti-dumping (“AD”) tax deposits at a consideration equal to 55% of the total deposits on an after-tax basis. As of August 31, 2022, Chaleur had owed approximately US$82 million on his CV and AD cumulatively.

President and Chief Executive Officer Ian Fillinger said: “New Brunswick has a safe, high quality and competitive log supply, a supportive investment climate and proximity to major eastern markets. It has a desirable SPF product mix and fits very well into our existing portfolio.Chaleur’s strong management team further strengthens our core wood strengths and this team We look forward to welcoming you to our company.”

On a pro forma basis, Interfor’s annual timber production capacity will increase to 5.1 billion board feet, of which 44% in the Southern United States, 19% in Eastern Canada, 15% in the Northwest United States, 15% in British Columbia, and 7% in Atlantic Canada. and.

The acquisition is expected to immediately increase Interfor’s revenues and deliver attractive returns in the short and long term. Interfor estimates Chaleur’s mid-cycle EBITDA at approximately C$50 million annually, given mid-cycle timber prices and current utilization performance. Interfor expects synergies of C$5 million annually from combined sales and marketing opportunities, shared purchasing programs, and reduced administrative costs. These synergies are expected to be fully realized within 12 months of closing with no capital requirement.

Interfor intends to finance the acquisition using a combination of cash on hand and existing credit facilities. Following the completion of this acquisition, Interfor will continue to have significant financial flexibility to execute strategic capital investment plans and explore additional value-creating capital deployment options. As of August 31, 2022, Interfor had net debt of approximately C$48 million, representing a net debt to invested capital ratio of 2%. The pro forma acquisition of Chaleur and Interfor’s C$100 million Substantial Issuer Bid will close on September 12, 2022, leaving Interfor’s net debt to invested capital ratio of less than 20% as of August 31, 2022¹Similarly, pro forma liquidity as of August 31, 2022 is approximately 322 million Canadian dollars.

Completion of the acquisition is subject to regulatory reviews in Canada and the United States, as well as customary conditions for such transactions, and is expected to close in the fourth quarter of 2022.

Chaleur’s business suffered no damage or impact from Hurricane Fiona.

This release, including the French version of this release, can be found in the news investor section of www.interfor.com.

Forward-Looking Statements

This release contains forward-looking information regarding the Company’s and Chaleur’s business prospects, objectives, plans, strategic priorities and other information that is not historical fact. Statements contain forward-looking information when the company uses what it currently knows and expects to make statements about the future. Forward-looking statements in this release include: capacity, future growth, demand growth, synergies, pro forma capacity, expected earnings and earnings, pro forma debt ratio, pro forma liquidity, borrowing capacity, regulatory Including, but not limited to, references to judging. and approval and expected closing dates, and other relevant factors. Readers are cautioned that actual results may differ from the forward-looking information in this release. Also, you should not place undue reliance on such forward-looking information. Risk factors that could cause actual results to differ materially from the forward-looking information in this release are discussed in Interfor’s annual management discussion and analysis under the heading “Risks and Uncertainties.” explained. at www.sedar.com. Significant factors and assumptions used to prepare the forward-looking information in this report include volatility in sales prices of timber, logs and wood chips. Our ability to compete on a global basis. Log supply availability and cost. natural or man-made disasters; exchange rates; changes in government regulations; Aboriginal Settlements; Our Ability to Export Products; softwood trade dispute between Canada and the United States; the environmental impact of our business; labor disruption; information system security; and the existence of a public health crisis. Unless otherwise stated, forward-looking statements in this release are based on our expectations as of the date of this release. Interfor does not undertake any obligation to update such forward-looking information or statements, except as required by law. Our independent auditor, KPMG LLP, has not performed an audit, review or procedure with respect to the interim financial results and other data contained in this release and, therefore, expresses an opinion or other form of assurance with respect thereto. Not a thing.

About Intel Four

Interfor is a growth-oriented forest products company with operations in Canada and the United States. With a timber production capacity of approximately 4.7 billion board feet per year, the company offers a wide variety of timber products to customers around the world. For more information on Interfor, please visit our website at www.interfor.com.

Investor Contact:

Rick Pozzebon, Executive Vice President and Chief Financial Officer
(604) 689-6804

Mike McKay, Vice President of Corporate Development and Strategy
(604) 689-6846

Media contact:

Svetlana Kayumova, Senior Manager, Corporate Affairs & Communications
(604) 422-7329
[email protected]

¹ The pro forma is based on a purchase price of C$325 million and 55% of the 31 August 2022 countervailing duty (“CV”) and anti-dumping (“AD”) taxes on Shallur. increase. 29% tax rate.

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